Keywords
Dividend Payout
Irregular Dividend Payers
Share Value
Stable Dividend
How to Cite
Abstract
The study undertakes to determine the impact of Dividend Decisions on the value of shares. For this purpose, the study attempts to know whether firms follow consistency in their dividend payments and if that consistency brings an effect on the value of the firm measured by shareprices. The firms listed on NSE 100 index has been taken as the sample and the firms are divided into three categories of Consistent Dividend Payers, Irregular Dividend Payers and Consistent as well as Stable Dividend Payers. Test results supported the use of Fixed Effects Method and Driscoll Kraay Robust Standard Errors are employed along to address the issues of multicollinearity, heteroscedasticity and autocorrelation. The results under all the firms, Consistent Dividend Payers, consistent as well as Stable Payers are almost the same which showed that Dividend payout is not an influencing factor of share value aligning with the MM theory of Dividend. But in case of Irregular Payers, Dividend payout appeared to be statistically significant indicating that payment of Dividend signals positive information to the market thereby increasing the value of shares. The results are mixed supporting both the Relevancy and Irrelevancy theory of Dividends.
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