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Dogra, Balram
- A Study on Validity of Lintner's Model of Dividend in Indian Companies
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Authors
Affiliations
1 Assistant Prof. at Apeejay Institute of Management, Jalandhar
2 Professor and Vice Chancellor, Sri sai group of Institutes, Palampur
3 Professor, University Business School, Punjab University, Chansigarh
1 Assistant Prof. at Apeejay Institute of Management, Jalandhar
2 Professor and Vice Chancellor, Sri sai group of Institutes, Palampur
3 Professor, University Business School, Punjab University, Chansigarh
Source
International Journal of Financial Management, Vol 1, No 4 (2011), Pagination: 53-62Abstract
Dividend declaration is considered as one of the key focus areas of the firm's financial policy. It is generally accepted that the payment of dividends is the most widely used instrument for the distribution of value to shareholders. Shareholders also prefer to receive regular dividends. A well-known model that attempts to explain dividend policy is that of Lintner (1956). This study investigates whether Lintner's model can be used to explain Indian companies' dividend payments or not. 172 companies listed with BSE with continuous dividend payments from 2004-08 have been selected from four industrial sectors: Engineering, FMCG, IT and Textiles. The study brings forth that Lintner's model does have a good fit in the selected Indian companies.Keywords
Dividend, Lintner’s Model and Multiple Regression Analysis
References
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- Stock Price Reaction to Dividend Announcements
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Authors
Affiliations
1 Assistant Professor, Apeejay Institute of Management, Jalandhar, IN
2 Professor and Vice-Chancellor, Sri Sai Group of Institutes, Palampur
3 Professor, University Business School, Punjab University, Chandigarh
4 MBA (Ex-student)Apeejay Institute of Management, Jalandhar
1 Assistant Professor, Apeejay Institute of Management, Jalandhar, IN
2 Professor and Vice-Chancellor, Sri Sai Group of Institutes, Palampur
3 Professor, University Business School, Punjab University, Chandigarh
4 MBA (Ex-student)Apeejay Institute of Management, Jalandhar
Source
International Journal of Financial Management, Vol 2, No 2 (2012), Pagination: 23-31Abstract
Dividend declaration is considered as one of the key focus areas of the organisation's financial policy. Majority of the companies consider it advantageous to declare the dividends, as it will have positive impact on its goodwill and the share prices. The dividend surprise conveys the same information as earnings surprise. Managers use the increase of dividends to signal about the firm. It means that firms announcing dividend initiations and increases should experience positive abnormal returns, while firms cutting and reducing dividend suffers negative abnormal returns. In this background, the present study is an attempt to study the stock price reaction to 65 dividend announcements (increase) by 28 companies during the period 2006-09 listed on BSE 30 Sensex. The analysis had been undertaken using Event study methodology. The study exposed the fact that stock prices do react to increase in dividend announcements and dividend announcements do possess signaling property. The study also found out that Indian stock market is inefficient.Keywords
Dividend, Information Content, Signalling TheoryReferences
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