EXPLORING THE EFFECT OF RETAINED EARNINGS ON THE SHARE PRICES OF LISTED INFORMATION AND COMMUNICATION TECHNOLOGY COMPANIES IN NIGERIA

This study examined the effect of retained earnings on the share prices of listed information and communication technology (ICT) firms in Nigeria, utilizing secondary data sourced from the annual reports and accounts of selected ICT firms over a period of ten years (2015–2024). The empirical analysis employed multiple regression modeling across pooled OLS, fixed effects, and random effects frameworks. The findings revealed that retained earnings (REP) demonstrated a positive and statistically significant impact on stock prices (β = 7.6360, t = 3.7683, p < 0.05 under the optimal Random Effects model). Return on Equity (ROE) showed a strong and statistically significant positive influence on share price (β = 56.5855, t = 5.4339, p < 0.05). Return on Assets (ROA) significantly and positively affected share prices (β = 0.1113, t = 8.1013, p < 0.05), while Earnings Per Share (EPS) displayed a negative but statistically insignificant effect (β = -0.1912, t = -0.8910, p > 0.05). Overall, the Random Effects model accounted for 62.72% of the variation in market share price (R² = 0.6272, Adjusted R² = 0.5858, F = 17.9546, p < 0.001). Based on the findings, the study recommends that corporate boards and management of listed ICT firms prioritize retaining a strategic portion of earnings rather than paying out total net profits as dividends, leveraging retained earnings as a low-risk, cost-effective internal funding mechanism to finance future expansion and technological innovation