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Divident Policy

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IMPACT OF DIVIDEND POLICY ON SHAREHOLDERS’ VALUE: A STUDY OF INDIAN FIRMS
Synopsis of the Thesis to be submitted in fulfillment of the requirements for the Degree of

DOCTOR OF PHILOSOPHY In MANAGEMENT
By Sujata Kapoor Enrollment No: 064009053 Date of Registration: July 2006 Under the Guidance of Supervisor: Dr Kanwal Anil Co-Supervisor: Dr Naseem Abidi

Jaypee Institute of Information Technology, Noida A-10, SECTOR 62, NOIDA, INDIA (12) December, 2009

Sujata Kapoor, JBS, JIIT,Dec’ 2009

TABLE OF CONTENTS S. no. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Contents Introduction Review of the literature Research objectives Research Methodology Lintner Model: Analysis and findings Factor Analysis and Regression results on Extracted Factors Quadratic Polynomial Regression Analysis & Findings Event study: Analysis & Findings Conclusion Chapter plan Selected References Annexure Page no. 4-9 9-14 14-15 15-23 23-24 24-28 28-30 30-32 32-35 35-36 36-38 (III-XX)

2

Sujata Kapoor, JBS, JIIT,Dec’ 2009

KEY TERMS
DIVIDEND PAYOUT RATIO: The percentage of earnings paid to shareholders in dividends. Calculated as:

DIVIDEND POLICY: The policy a company uses to decide how much it will pay out to shareholders in dividends. SHAREHOLDERS’ VALUE: The value delivered to shareholders because of management's ability to grow earnings, dividends and share price. In other words, shareholder value is the sum of all strategic decisions that affect the firm's ability to efficiently increase the amount of free cash flow over time. LINTNER MODEL: A model stating that dividend policy has two parameters: (1) the target payout ratio and (2) the speed at which current dividends adjust to the target. AGENCY COST: A type of internal cost that arises from, or must be paid to, an agent acting on behalf of a principal. Agency costs arise because of core problems such as conflicts of

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