Comparative Analysis on the Wealth of the Shareholders among Dividend Paying and Non-paying Companies in Indian Pharamaceutical Companies

Background/Objectives: One of the important and complex decisions in the area of finance is dividend decisions. The main purpose of this study is to know the shareholders wealth between the companies who pay dividend and companies not paying dividend in Indian pharmaceutical industry. Method/Statistical Analysis: Based on Market Capitalization the top Ten dividend paying pharmaceutical companies and ten non-dividend paying companies listed in NSE has been selected. Data were collected for 15 years from 2001 to 2015 from the companies' reports and Prowess database. Tools Mean and Independent t statistics were used for the study. Findings: The average market to book value of equity of companies paying dividend is more than the non-dividend paying companies and through independent t test the results were statistically verified. Applications/Improvement: Based on the study the investors can opt for dividend paying companies than the non-dividend paying companies for investment. This would increase their wealth in the long term. The study can be extended to different industry with long years of data.