Lintner (1956) proposed that dividend
depends to the limited extent on the organization’s present earnings and to
some degree on the previous year’s dividend. He additionally bargains that
organizations likes to make periodic partial adjustments toward a target payout
ratio instead of bigger changes in dividend payout. According to Lintner,
managers may increase dividends once they are sure that they can sustain them
at the new level consistently.
and Narender : tested the Lintner’s
model of Dividend Payment on Public Sector Units (PSUs) in India. The study
concluded that, the number of Dividend Paying PSUs compared to the total number
of PSUs is quite small. The study also came to the conclusion that, the
Dividend Payment Ratio (DPR), remain constant for most of the companies, even
if the Earning per Share (EPS) figure shows a constant improvement. On the
other hand Saxena (1999) found that, past revenue growth rate, future earnings
forecast, how many shareholders a company has, and systematic risk act as the
Determinants of Dividend Payout Policy.
Savita (2014) has made study on dividend signaling hypothesis. A
case study of BSE SENSEX companies. The present study is
attempts to contribute positively to the understanding of the behavior of
Indian share prices in relation to the dividend announcement.
S. A. and Alade S.O. (2013) Dividend Policy and
Corporate Performance in Nigeria. These data were subjected to regression
analysis, using e-view software and the findings indicate that; there is a
significant positive relationship between dividend policies of organizations
and profitability, there is also a significant positive relationship between
dividend policy and invest- ments and there is a significant positive
relationship between dividend policy and Earnings per Share.
& Kapoor (2008) analyzed the dividend
payout ratio of all the companies belonging to the CNX IT index of NSE in the
Indian IT sector over a period of six years from 2000 to 2006. They identified
current and anticipated earnings, liquidity and corporate tax, risk and growth
as the key factors affecting the dividend payout ratio. The study revealed that
liquidity and risk were the most important determinants of dividend payout in
the Indian IT sector.
& Sunita (2005) studied the impact of
Share repurchases & Dividend announcements on Stock prices in the context
of Indian IT sector during the period (2002-2004). They examined the signaling
effect of Stock repurchases and Dividend announcements. The study examined abnormal
returns across various repurchases level. They have taken the firms listed in
the BSE Index for the purpose of empirical investigation. The study covers the
impact on stock prices five days prior and after the dividend announcement. The
result exhibits the upward trend of share price movement after the dividend
announcement. The crucial point of their findings is that positive signaling
existed only for a day after the announcements. After which the extent of
positivism of shares starts declining. Their finding shows that market reaction
in the Indian context to events or announcements such as share repurchases and
dividends generally fluctuate around day or two. The study can be cited as
important for the present study.