Effect of Dividend Policy on the Value of Companies in India: An Emperical Study

Abstract

Dividend is the share of the net profit of a corporation made available to its shareholders as a return on their company investment. The shareholdings may be either paid in cash (where the cash is paid out or in stock (where the benefit is replenished and the bonus shares are given to the shareholders) or paid in cash and in stock. At the end of every financial year, net earnings that remain after other credits, including the payment of business revenue tax, the transfer to reserve accounts and retained earnings, shall be paid out as dividends, are of interest to investors. Dividend payment appears to increase the company's share value on the stock market due to its knowledge quality on the company's results.