(+91) 8283802090Introduction
A project on corporate dividend policy explains how companies decide to distribute profits to their shareholders. A dividend is the part of profit that a company pays to its shareholders. When a company earns profit, it can either reinvest the money back into the business as retained earnings or distribute a portion of it as dividends.
In joint stock companies, dividends are usually paid as a fixed amount per share. Shareholders receive dividends according to the number of shares they hold. Paying dividends is not considered an expense for the company; it is simply the distribution of profit among owners. Public companies generally declare dividends on a regular schedule, such as quarterly or annually. Sometimes, companies also announce special dividends.
Dividends are mostly paid in cash, but companies may also offer shares instead of cash. Some companies provide dividend reinvestment plans, where shareholders can use their dividend amount to buy additional shares automatically.
Dividend policy plays an important role in influencing investor confidence and market value. When a company announces dividends, it may affect share prices and trading volumes. Therefore, studying dividend policy helps in understanding market reactions and investor behavior.
Objectives of the Study
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To understand the concept and importance of corporate dividend policy.
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To study the impact of dividend announcements on share price and trading volume.
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To examine whether abnormal changes occur in price and volume around dividend announcements.
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To analyze the possibility of insider information affecting trading activity.
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To measure the overall impact of dividend policy on market capitalization before and after announcement dates.
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To identify general trends related to dividend announcements in the stock market.