CHAPTER-1

1.1 Abstract:
As Bangladesh is a developing country, the corporate culture is growing very slightly in our country. One of the important aspects of a corporation is its "Dividend Policy" that affects the financial structure, flow of funds, liquidity, price of stocks, and shareholder's satisfaction. This paper attempts to determine how the British American Tobacco Bangladesh Company Ltd. (BATBC) uses its dividend policy to increase the value of the firm and the impact of dividend policy on its stock price. We tried to illustrate and analyze net income, earning per share, cash dividend, stock dividend, dividend payout ratio and right share for empirical analysis of dividend distribution of British American Tobacco Bangladesh. The expectations of dividends by shareholders helps them determine the share value, therefore, dividend policy is a significant decision taken by the financial managers of any company.

1.2 Introduction:
Dividend Policy is concerned with taking a decision regarding paying cash dividend in the present or paying an increased dividend at a later stage. The firm could also pay in the form of stock dividends which unlike cash dividends do not provide liquidity to the investors; however, it ensures capital gains to the stockholders. The expectations of dividends by shareholders helps them determine the share value, therefore, dividend policy is a significant decision taken by the financial managers of any company.

British American Tobacco Bangladesh Company Ltd. is the market leader in cigarette manufacturing companies in Bangladesh. BATBC is a company faced with multifarious challenges of tobacco manufacturing industry. British American Tobacco Bangladesh Company Ltd. (BATBC) is one of the pioneer cigarette manufacturers in the world. The company was formed at the turn of the 20th century with the objective of