Indira Management Review

Open Access Open Access  Restricted Access Subscription Access

The Relationship between Dividend Payout Fakhruddin Sunelwala and Firm Performance: A study of Automobile Companies Operating in India


Affiliations
1 Datta Meghe Institute of Management Studies, Nagpur, India
 

Dividend policy is basically concerned with deciding to pay dividend in cash now, or to pay increased dividends at a later stage or distribution of profit in the form of bonus shares. Dividend payment is an important consideration used by present as well as prospective shareholders in valuing the worth of the share. This paper gives an insight of various dividend models like WALTER'S MODEL, GORDON'S MODEL & MODIGLIANI AND MILLER APPROACH. This research paper is an effort to find out the impact of firm performance that is net income or profit on dividend payout policy of the selected automobile companies by using multiple regression technique. The results of the regression analysis showed that up to 46 % (R-Square) of the Dividend Payout Ratio was affected by Return on Capital employed (ROCE) and Return on net worth (RONW).

Keywords

Dividend Policy, Dividend Models, Dividend Payout Ratio, Return on Capital Employed and Return on Net Worth.
User
Notifications
Font Size


  • Amidu, M. (2007). How does dividend policy affect performance of the firm on Ghana stock Exchange. Investment Management and Financial Innovations, 4(2), 104 - 112

  • Amitabh Gupta Charu Banga, The Determinants of Corporate Dividend Policy, Decision, Vol. 37, No.2, August, 2010

  • Arnott, D. R., & Asness, S. C. (2003). Surprise higher dividends are higher earnings growth. Financial Analyst Journal, 70-87.

  • Zhou, P. & Ruland, W. (2006). Dividend payout and future earnings growth. Financial Analysts Journal, 62(3), 58-69.

  • The Effect of Ownership Structure on Dividend Payout Policy: Evidence from Jordanian Context “American Economic Review, 64(3), 304-318.

  • Bhattacharya, S. (1979). Imperfect Information, Dividend Policy, and "the Bird in the Hand" fallacy. The Bell Business , XXXIV (4) , 411-433. http://dx.doi.org/10.1086/294442

  • Fama, E. F. (1974). The Empirical Relationship Between the Dividend and Investment Decisions of Firms.

  • Gorden, M. J. (1959). Dividends, Earnings, and Stock Prices. Review of Economics and Statistics, 41, 99-106. Journal of Economics, 10, 259-270. http://dx.doi.org/10.2307/3003330

  • Miller, M. H., & Modigliani, F. (1961). Dividend Policy, Growth , and The Valuation of Shares.(www.ccsenet.org/ijef International Journal of Economics and Finance Vol 4, No. 2; February 2012)

  • Rozeff, M.S. (1982) 'Growth, beta and agency costs as determinants of dividend policy', the journal of financial research, vol. V, no. 3, Fall, pp. 249-259.


Abstract Views: 406

PDF Views: 258




  • The Relationship between Dividend Payout Fakhruddin Sunelwala and Firm Performance: A study of Automobile Companies Operating in India

Abstract Views: 406  |  PDF Views: 258

Authors

Fakhruddin Sunelwala
Datta Meghe Institute of Management Studies, Nagpur, India
Akash Deepak Agrawal
Datta Meghe Institute of Management Studies, Nagpur, India

Abstract


Dividend policy is basically concerned with deciding to pay dividend in cash now, or to pay increased dividends at a later stage or distribution of profit in the form of bonus shares. Dividend payment is an important consideration used by present as well as prospective shareholders in valuing the worth of the share. This paper gives an insight of various dividend models like WALTER'S MODEL, GORDON'S MODEL & MODIGLIANI AND MILLER APPROACH. This research paper is an effort to find out the impact of firm performance that is net income or profit on dividend payout policy of the selected automobile companies by using multiple regression technique. The results of the regression analysis showed that up to 46 % (R-Square) of the Dividend Payout Ratio was affected by Return on Capital employed (ROCE) and Return on net worth (RONW).

Keywords


Dividend Policy, Dividend Models, Dividend Payout Ratio, Return on Capital Employed and Return on Net Worth.

References