Y?ce (2001) investigated “The
Information Content of Dividend Announcements: An Investigation of Indian stock
Market” The purpose of this research is to examine the information content of
dividend announcements and price movements in the emerging Indian stock market.
The paper investigates the information content and market reaction to dividend
announcements using data from the developing Indian market. And it focuses on
the information content of dividend policies through the share price reaction
of 82 companies in India that are listed in the Bombay Stock exchange.
Frankfurter & Wood Jr. (2002) investigated “Dividend Policy Theories And
Their Empirical Tests” The purpose of this paper is to determine if the method
of analysis employed, sample period, and/or data frequency are responsible for
this inconsistent support. The results presented here are consistent with the
contention that no dividend model, either separately or jointly with other
models, is supported invariably.
Yarram (2002) analyzes the trends and
determinants of dividend of all Indian companies listed on two major Indian
stock exchanges–The Bombay Stock Exchange (BSE) and The National Stock Exchange
(NSE) during 1990-2001. He investigates three factors i.e., number of firms
paying dividend, average dividend per share and the average payout and its
effects on share price. His results indicate that only few companies maintain
the dividend payout rate and that firms forming a part of small indices pay
higher dividend compared to firms forming a part of broad market indices.
Deviations in the tax regime are also examined using the trade off theory and
it is found that this theory does not apply to the Indian corporate sector. He
concluded that the omission of dividends have information content that is such companies expect lower earnings in the
future whereas the same does not hold true in case of dividend initiations.
(2008) examines the influence
of earnings and lagged dividend on dividend policy of companies listed on the
BSE. He found that the current years earnings are the foremost factor affecting
the dividend behavior of a firm.
Again, Bhat and Pandey (1994) show that payment of
dividend depends largely upon current and expected earnings as well as on the
pattern of past dividends, and liquidity is not a matter of consideration in
Anand (2004) in his study seeks to find
the factors determining the dividend policy of corporate India by analysing the
results of the survey of 81 CFOs bt-500 companies and the most valuable PSU in
India conducted in 2001. To find out the factors determining the dividend
decision, the study used factor analytic framework on the CFO’s response. The
findings of the dividend policy were in line with the Lintners’s model. The
result revealed that the management considered dividend decision as important
as they indicated future prospect of the firm and influenced its market value
(share price). It was seen that the management considered the investors
preference in determining the dividend policy. The management has target
pay-out ratio but is in favour of stable dividend policy. Thus, the policy is
material to the management and the investors.
Amidu and Abor (2006) undertook a study based on
the 22 listed companies in Ghana, which accounted for 76 per cent of the listed
companies covering a period of 6 years from 1998 to 2003. The purpose of the
study was to analyse the factors which determine the dividend payout ratio. The
study revealed positive correlation between dividend payout ratio (DPR) and
profitability, cash flow and tax. Negative correlation existed between DPR and
risk, institutional holdings, growth and market to-book value.
Anil & Kapoor (2008) analysed the dividend
payout ratio of all the companies belonging to the CNX IT index of NSE in the
Indian Information Technology sector over a period of six years from 2000 to
2006. They identified current and anticipated earnings, liquidity, corporate
tax, risk and growth as the key factors affecting the dividend payout ratio.
The study revealed that liquidity and risk were the most important determinants
of dividend payout in the Indian Information Technology sector.
Priya and Nimalathasan (2013) found that dividend payout
had a significant impact on all the firms’ performance except for return on
investment (ROI) and return on equity (ROE). Besides, earnings per share (EPS),
price earnings ratio (P/E), and market value to book value (PB) had significant
correlation with ROA; P/E ratio had significant correlation with ROE; EPS and
market price to book value (PB) were significantly correlated with ROE of the
listed firms of hotels and restaurants in Sri Lanka. Kumaresan (2014) showed
that there was a positive relationship between return on equity, dividend per
share and dividend payout and shareholders’ wealth of the firms while there was
a negative relationship between retention ratio and shareholders’ wealth of
listed firms in hotels and travel sector of Sri Lanka. Iqbal et al. (2014)
found that the DP, firm size and firm growth had significant positive impact on
SW of the selected manufacturing industries (textile, sugar and chemical) of
and Narender : tested the Lintner’s
model of Dividend Payment on Public Sector Units (PSUs) in India. The study
concluded that, the number of Dividend Paying PSUs compared to the total number
of PSUs is quite small. The study also came to the conclusion that, the
Dividend Payment Ratio (DPR), remain constant for most of the companies, even
if the Earning per Share (EPS) figure shows a constant improvement. On the
other hand Saxena (1999) found that, past revenue growth rate, future earnings
forecast, how many shareholders a company has, and systematic risk act as the
Determinants of Dividend Pay-out Policy
(2009) researched on
Determinants of Dividends in the context of Gulf Co-operation Council (GCC)
countries, this particular study found that, the primary intention of paying
dividend is reduction of agency cost. This study also found that, the firms do
not look for long term target as far as Dividend Pay-out Ratio is concerned.
The study concluded that, Dividend Pay-out Ratios have strong positive
correlation with Ownership Structure, Firm Size, Firm Profitability, and
negative correlation with the Leverage Ratio.
Booth and Cleary (2003) made a comparative
study of the dividend policy of the US with emerging markets. The emerging
markets include different countries like Jordan, Pakistan, India, South Korea,
Turkey, etc. It was observed that the dividend behaviour of emerging markets is
in line with US firms. However, the empirical dividend policy equation showed
different sensitivity of variables in different countries. The emerging markets
having greater dependence on bank debts reveals the role of asset-mix in
dividend policy. On the whole, the country specific factors play an important
role in influencing the dividend policy.
N. R. Parasuraman,(2012) The aim of this research paper was to study the
effectiveness of Linters’ model for dividend payout. Analysis made on BSE
Sensex firms during the period 2002-2011.For study purpose Linter model and
another three basic models were used. Multiple regression were used to test the