Impact of Dividend Pay-Out on Market Price of Share With Special Reference to Automobile Sector Companies Listed on NSE

Abstract

Many variables have an impact on the share’s market price such as Government policies, firm’s financial performance etc. This paper attempted to find out relationship between dividend pay-out and market price of the share. Financial manager must take three major decisions i.e. Financing decisions, Investment decisions and Dividend decisions. The third vital decision of a company is the volume of cash to be given to shareholders. Dividend policy includes the part of earnings given to shareholders in cash as dividends. This paper takes into consideration the automobile sector companies listed in NIFTY 50 for 10 years i.e. 2009 to 2018. It attempts to find out whether dividend decisions of the company affect its market price. Generally speaking shareholders expect a return from the company. After the analysis, the study concluded that there exists a robust relationship between dividend pay-out ratio and market value of certain companies and some companies had negative relationship.