A Study On The Effect Of Dividend Strategy In Bombay Stock Exchange

Abstract

Businesses are torn between using their gains for future investments or allocating a large, little, or none at all as dividends to their shareholders. Companies' dividend policies can either positively or negatively affect the price of their stock since they have to strike a balance between the conflicting interests of various shareholders. The effect of dividend policy on stock prices is investigated in this study. The goal of the study is to ascertain whether stock prices and dividend policies are related in any way. Dividend payment percentages for each of the 100 index businesses were determined by the study. Companies that fall within the dividend payout percentage range of 0%–10% are classified as no dividend yield stocks, 11%–20% as low dividend yield stocks, and 21% and above as high dividend yielding stocks, according to the derived values. Thus, during the period from 2008 to 2020, 16 businesses listed under the Bombay Stock Exchange SENSEX 100 index are chosen as the real sample, with 8 of them being classified as High dividend yield stocks, 4 as Low dividend yield stocks, and the remaining 4 as No dividend produce stocks.