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Abstract
The payment made by companies to its shareholders in return of the capital invested by them is defined as dividend. In some cases, companies may distribute stock dividends along with the cash dividends which are usually in the form of stock shares which are issued additionally to the shareholders. They are also known as stock splits. The dividend pay-out by companies is a simple way of communicating financial well-being and shareholders’ value to all the stakeholders. The maximum the dividend paid out by the maximum is its shareholders value. Dividend pay-out also denotes the financial stability and profit-making capacity of the shareholders. For the purpose of analysis only four factors are considered, three factors are independent and one is dependent. Dividend per share (DPS), earnings per share (EPS) and legged market price per share of the immediate previous period (MPSt-1), these are the independent factors and current market price is the dependent factors. Dividend policy is measured by dividend per share and shareholders wealth is measured by the current market price of share. In this study, it found that there is a highly impact of dividend policy on the shareholders.