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Cash Dividend Policy

1291 Words6 Pages

Abstract
Dividend policy may play a very vital role that helps to guide the market price of any company. It is an important topic to know for the investor’s to maximize their wealth. In this study, two variables are taken as independent variables: cash dividend and bonus shares and investor decision is taken as dependent variable. The intention of this study is to inspect the impact of bonus shares and cash dividend on investor’s decisions. The study is based upon primary data and has used non-probability sampling technique to select 100 investors from NEPSE. The data was collected from the brokerage firms. The data has been analyzed by using descriptive statistic, correlation and regression analysis. Result of the analysis shows that there …show more content…

Whether to issue dividends, and what amount, is determined mainly on the basis of the company's inappropriate profit (excess cash) and influenced by the company's long-term earning power. When cash surplus exists and is not needed by the firm, then management is expected to pay out some or all of those surplus earnings in the form of cash dividends or to repurchase the company's stock through a share buyback program. Dividend policy is one of the most widely researched topic in the field of finance , It is important for everyone working in the company as well as people who are investing upon it which are investors, managers ,lenders and for other stakeholders. The investor use dividend yield calculation to measure the amount of income received in proportion to the share price.
Dividend policy is an important element in a corporation. Dividend reflects the corporation power and provides a stable income for shareholder. Eventually, it increases the confidence of shareholder especially in their yield. Dividend is the repayment to the shareholders for investments made by them in the shares of the company. The investors are interested in earning the maximum return on their investments and to maximize their wealth. A company, on the other hand, needs to provide funds to finance its long-term …show more content…

Likewise, lenders are also interested on the dividend amount paid by the company. So, the main purpose of this report is to explain the investigating impact of bonus shares and cash dividend on investor’s decision in the context of Nepal.
NEPSE ( Nepal stock exchange):
Nepal Stock Exchange, in short NEPSE, is established under the company act, operating under Securities Exchange Act, 1983.
My research will focus on the brokers of NEPSE and the sample is gathered from them. The basic objective of NEPSE is to impart free marketability and liquidity to the government and corporate securities by facilitating transactions in its trading floor through member, market intermediaries, such as broker, market makers etc. NEPSE opened its trading floor on 13th January 1994. Government of Nepal, Nepal Rastra Bank, Nepal Industrial Development corporation and members are the shareholders of NEPSE. Members

Members of NEPSE are permitted to act as intermediaries in buying and selling of government bonds and listed corporate

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