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Dividend policy: its influence on the value

of the enterprise for the last Ten years



Roll no. RQ4901A13

no .RQ4901A14

Roll no.RQ4901A15





The Automotive industry in India is one of the largest in the world and one of the fastest growing
globally. India manufactures over 11 million vehicles (including 2 wheeled and 4 wheeled) and
exports about 1.5 million every year. It is the world's second largest manufacturer of
motorcycles, with annual sales exceeding 8.5 million in 2009. India's passenger car and
commercial vehicle manufacturing industry is the seventh largest in the world, with an annual
production of more than 2.6 million units in 2009. In 2009, India emerged as Asia's fourth largest
exporter of passenger cars, behind Japan, South Korea and Thailand.
As of 2009, India is home to 40 million passenger vehicles and more than 2.6 million cars were
sold in India in 2009 (an increase of 26%), making the country the second fastest growing
automobile market in the world. According to the Society of Indian Automobile Manufacturers,
annual car sales are projected to increase up to 5 million vehicles by 2015 and more than 9
million by 2020. By 2050, the country is expected to top the world in car volumes with
approximately 611 million vehicles on the nation's roads.

Figure 3: Vehicle Production in India

A chunk of India's car manufacturing industry is based in and around the city of Chennai, also
known as the "Detroit of India" [With the Indian city accounting for 60 per cent of the country's

automotive exports]. Gurgaon and Manesar near New Delhi are hubs where all of the Maruti
Suzuki cars in India are manufactured. The Chakan corridor near Pune, Maharashtra is another
vehicular production hub with companies like General Motors, Volkswagen, Skoda, Mahindra
and Mahindra, Tata Motors, Mercedes Benz, Fiat, Force Motors. Ahmedabad with Tata Motors
Nano plant and Halol with General Motors in Gujarat, Aurangabad in Maharashtra, and Kolkata
in West Bengal are some of the other automotive manufacturing regions around the country.
Tata Motors Limited (Tata Motors) is an automobile company. The Company is engaged mainly
in the business of automobile products consisting of all types of commercial and passenger
vehicles, including financing of the vehicles sold by the Company. The Company has two
segments: automotive and others. The others segment includes construction equipment,
engineering solutions and software operations.
Instigated in the year 1945, Tata Motors has a wide network of retailers and suppliers across
India. It was in 1954 that the company launched its first vehicle. Today more than 3 million Tata
cars and heavy vehicles glide through Indian roads. The company gained the prestige of being
the first from engineering industry of India to be listed under the New York Stock Exchange in
September 2004.
Besides being second biggest in the passenger car division, Tata Motors is also ranked as fifth
highest in the category of medium and heavy commercial vehicles at international level. With the
help of its associates, Tata Motors offer high end manufacturing and automotive solutions to its
customers. It's foremost indigenously made car was Tata Indica, followed by a mini-truck Tata
Ace in 2005. In the year 2009, the firm marked its name in the pages of automotive history by
introducing the world's fuel efficient and cheapest car - Tata Nano.
To start with the topic firstly we will brief about dividends. Dividends are the payments made
by an organization to its shareholders or members. It is basically a portion of corporate profit
that is paid out to the shareholders. When any organization earns profit, the money that the
organization gets can be used in two ways to fulfill the expectations of the shareholders i.e. to
meet the cost of equity.
Either it can be reinvested in the business or
It can be paid to the shareholders as dividends.
Many companies just retain a part of the earnings and pay the remainder as a dividend.
Dividend is allocated as a fixed amount of a share and hence shareholders get the dividend in
proportion to their shareholding. Dividend can be of two types,
Cash dividend, in which organization gives cash to its shareholders in proportion to their
Stock dividend, in which each shareholder is given extra shares depending on the
number of shares it has currently. In this cash is not given but extra share is given
instead of that.
Now Dividend policy refers to the policy that the management formulates in regard to earnings

for distribution as dividends among shareholders. It determines the division of earnings

between payments to shareholders and retained earnings.
1. To balance the growth of the company and the distribution to the shareholders.
2. A critical influence on the value of the firm
3. To strike a balance between the long term financing decision (company distributing
dividend in the absence of any investment opportunity) and the wealth maximization.
4. The market price gets affected if dividend paid are less
5. Retained earnings helps the firm to concentrate on the growth, expansion and
modernization of the firm
6. To sum up, it to a large extent affects the financial structure, flow of the funds,
corporate liquidity, stock price and growth of the company and investors satisfaction.


1. Liquidity of Funds
2. Extent of share Distribution
3. Trade Cycles
4. Government Policies
5. Taxation Policy
6. Legal Requirements
7. Past dividend Rates Ability to Borrow
8. Policy of Control
9. Repayments of Loan
10. Time for Payment of Dividend
11. Regularity and stability in Dividend Payment
Broadly these are the factors that affect dividend payout ratio and hence the dividend policy for
a company. But we have in our study taken limited factors and not all of these. The factors that
we have taken are,
_ Net sales
_ Profit after tax i.e. PAT
_ Market capitalization
_ Capital expenditure
_ Cash and cash equivalents at the end of year
TATA motors has a very balanced dividend policy since 1955 (Exhibit 1). In all, but two years
the company has paid a healthy dividend. Dividend smoothing has enabled the company so pay

dividend even at the cost of negative retained earnings. Despite being a growth company
expanding in new sectors the company has continued to strike a balance between retained
earnings and dividend pay-outs. In times when the company has been in crisis they have looked
at others measures of satisfying the needs for liquidity for shareholders like issue of Bonus
Automobile market is cyclic and the effect can be seen in the earnings of TML as well.
Whenever the profits of the company have exceeded expectations, the company has declared an
interim dividend while continuing with the existing pay-out ratio for regular dividends. Outside
India the company is also listed on the NYSE. The dividend policy of TML has helped build a
special relationship with retail customers who comprise more than 7 per cent of the shareholders.
Rights Issue
A rights issue is a way in which a company can sell new shares in order to raise capital. Shares
are offered to existing shareholders in proportion to their current shareholding, respecting their
pre-emption rights. The price at which the shares are offered is usually at a discount to the
current share price, which gives investors an incentive to buy the new shares if they do not,
the value of their holding is diluted.
A rights issue by a highly geared company intended to strengthen its balance sheet is often a bad
sign. Profits are already low (or negative) and future profits are diluted. Unless the underlying
business is improved, changing its capital structure achieves little. A rights issue to fund
expansion can usually be regarded somewhat more optimistically, although, as with acquisitions,
shareholders should be suspicious because management may be empire-building at their expense
(the usual agency problem with expansion). The rights are normally a tradable security
themselves (a type of short dated warrant). This allows shareholders who do not wish to purchase
new shares to sell the rights to someone who does. Whoever holds a right can choose to buy a
new share (exercise the right) by a certain date at a set price.
Rights Issue in 2001
The Board of Directors of approved the simultaneous Issue of Convertible Debentures and NonConvertible Debentures with Detachable Warrants on a rights basis in the ratio of one CD and
one NCD for every five shares (1:5) of the Company held. The Company expected to raise
approximately Rs. 1,228 crores - Rs. 1,382 crores from the proposed rights issue. The proceeds
of the rights issue was planned to be used for essential capital expenditure and new product
development programs and repayment/ prepayment of expensive borrowings of the Company.
The infusion of long term funds, by way of this rights issue, was expected improve the cash
flows and the debt equity ratio.
Rights Issue in 2008
In May 2008 the company announced its long term financing plan for Jaguar-Land Rover
acquisition. At that time, the Company had announced that a part of the total funds required
would be raised through a Rights Issue to the shareholders of three simultaneous but unlinked
securities namely a) an issue of Ordinary Shares of a total amount of about Rs.2,200 crores; b) an

issue of A Ordinary Shares having differential voting rights (viz. 1 vote for every 10 shares
held) of a total amount of about Rs.2,000 crores and c) an issue of 0.5% 5-year Convertible
Preference Shares of a total amount of about Rs.3,000 crores, which would be convertible into
A Ordinary Shares at any time after 3 years but before 5 years from the date of allotment.
Changes in Capital Market and the level of prices in the stock markets led the Board of Directors
to decide to keep the increase in Share Capital as low as possible, the Board decided - 1.To
restrict the Rights Issue only to two simultaneous but unlinked securities namely (a) an issue of
Ordinary Shares and (b) an issue of A Ordinary Shares having differential voting rights, as
already announced; and 2. In place of the issue of Convertible Preference Shares, it is now
proposed to raise the required resources by monetizing a part of the Companys investments
through a phased divestment of certain investments (preferably as inter-group sales wherever
feasible) at prevailing market prices over the next 6 to 8 months. The funds released from such
future divestments together with those already sold during the current financial year, will form
part of the resources to be raised for repaying the bridging loan taken for the Jaguar-Land Rover
2008 - 2009 Crisis
TMs original core business in the passenger car division (small cars in India) was mildly
influenced by the crisis as TMs passenger car sales decreased by only 5%. The company was
much more negatively affected by the decline in sales of its commercial vehicle division which
represented not yet taking into account the JLR acquisition some 2/3 of its turnover.
However, the financial crisis had a much more serious impact [in the last quarter of 2008 and the
first quarters of 2009] because of the burden of two major strategic initiatives. The shift of the
production site and postponement of the full Nano launch which was originally scheduled for
launch in March 2008 by two years led to unexpected resource needs (new manufacturing site)
and a shortfall of otherwise expected 2008-09 revenues. While this burden was not caused or
much exacerbated by the crisis in the global car industry, the acquisition of JLR only few months
before the onset of the crisis actually affected TM much more: the dramatic decrease in JLRs
sales (JLR being fully exposed to European and US markets) significantly increased the heavy
losses of the new combined company in FY 2008/09; even more importantly, the refinancing of
the short term bridging loan of $ 3 billion for the acquisition became much more complicated
and costly in a situation of dried up capital markets. The refinancing difficulties and increasing
financing cost contributed to a serious debt overload of TM which might have led to bankruptcy
(and a take-over) if the TM would have been a stand-alone company and would not have been
protected and supported by its affiliation to the Tata group and its well-connected chairman.
While it is no surprise that the crisis caused (temporary) problems and challenges for TMs
business it seems much more remarkable how little effect it had on the companys strategy. TM
steered through the crisis without much change in its path-changing (Nano) as well as its pathbreaking (JLR) strategy initiatives.
The constancy of purpose as well as a continuous and consistent execution of strategic plans was
maintained despite highly sceptical capital market markets which had temporarily withdrawn
support from TM. The unwavering pursuit of a transformational strategy of TM in the face of the
financial crisis can be ultimately explained only by the affiliation of the company to a very

strong and supportive conglomerate with a particular mode of operation: TM is one of the few
strategic companies of the Tata group; it is guided personally by the Chairman of the Tata
Group who has committed the group to a course of globalization and innovation while relying on
Indias comparative location advantages; it allows the company to sustain long periods of low
profitability and significant investments in resource and capability accumulation; TM profits
from the value and attraction of the TATA brand in its dealings with suppliers, customers and the
Government, as well as in attracting talented staff; it also profits from various group support
services like the groups excellence model, its acquisition and finance expertise and its training
efforts. This inherent affiliation strength enabled TM to even use the crisis as an accelerator
for the implementation of its strategies by legitimizing a more swift course towards cost cutting
in the JLR operations (announced closure of one plant and shift of significant supply sources to
India). It may also have facilitated the far-reaching changes in TMs top management as
experienced top managers were available due to the crisis and a change of top management
seemed to be justified in view of TMs difficulties and temporary low performance. It can
therefore be concluded that the financial crisis has not much affected TMs transformational
change or even reinforced and accelerated it.

Dividend and stock price snapshot of Tata Motors of last 10 years

PAT, Retained Earnings and equity dividend snapshot of Tata Motors of last 10 years

Vehicle Production in India


Before starting the discussion, lets review the origin and evolution of corporate dividends
provided an example from history. The authors note that in early sixteenth century captains of
sailing ships in Great Britain and Holland began selling to investors claims to the financial
payoffs of the voyages. At the conclusion of the voyages, proceeds from the sale of the cargo and
shipping assets, if any were divided among the participants proportionate to ownership in the
enterprise. These distributions were in fact nothing more like payments that effectively liquidated
the venture, or liquidating dividends. By the end of the century, these claims on voyage outcomes
began trading in the open market. These claims to outcomes were later replaced by share
Even before the modern capital theory developed alongside with the statistical measurement of
the impact of diversification on portfolio risk, investors in these sailing ventures regularly
purchased shares from more than one captain to diversify the risk in these endeavours. Also, like
in the modern corporation, investors provided capital for these ventures, while the captains
offered their skills for instance, seafaring and managerial skills.
Modgliani and Miller, (1961) The crux of debate on the dividend policy is the division of
retained earnings i.e. profit after tax (PAT) between dividend and earnings as internal resources.
According to a widely discussed theory, the value of a firm is not subject to the dividend policy
followed but depends on the earnings power of the firm. Hence instead of deciding on how to
split the earnings between dividends and retained earnings, the firm should endeavor towards
having an optimal investment policy resulting in optimal return.
Gordon, (1962) A rational investor would normally discount the future of distant dividends
at a higher rate than near dividends as a matter of averting risk. Hence a company paying a
higher dividend will always command a higher price for its share than a company having same
earning power but paying lesser dividend.
Walter,(1963) The growing firm where, internal rate of return is more than the cost of
raising finance from outside would normally opt for paying minimum possible rate of dividend
and ploughing back more profits for further investment opportunities. A growing firm can
maximise its shareholders wealth by retaining all the profits. It is reverse in the case of a
declining firm.
Farrar and Selwyn, (1967) Investors world normally prefer low dividends as the dividends are
subject to higher tax rate than that in the case of capital gains resulting out of earnings
capitalisation But the investors in lower or no-tax bracket would prefer higher dividend rates
since they consider the dividends as a source of regular income.
Bhat and Pandey, (1994) In a recent study conducted on Tata motors reveals that the firms in
India specify their dividend policy in terms of DPS or dividend rate. The previous years
dividend rate plays a significant role in deciding the current years dividend rate than the current
years earnings.
Frankfurter and Wood (1997) concluded their survey with a next observation:
Our conclusion, based on study, is that dividend-payment patterns (or what is often referred to
as dividend policy) of firms are a cultural phenomenon, influenced by customs, beliefs,

regulations, public opinion, perceptions and hysteria, general economic conditions and several
other factors, all in perpetual change, impacting different firms differently. Accordingly, it cannot
be modelled mathematically and uniformly for all firms at all times .
In this paper well try to make a model which will help to describe the most acceptable policy or,
at least, to show what strategy is better.
Now lets look at the modern economy. There are many firms in the market and each of them has
its own value, some of them become extremely expensive and some of them become bankrupt.
What are the reasons which determine and can affect the firms value? There are many
approaches in this area but I would like to mention some of them. They are: managerial style,
ownership structure, Political stability, Dividend payout under the influence of different factors
(taxes for instance).
What are the instruments using which the top-management (and owners of course) can
increase the market value of the firm? Firstly, lets think about exactly this top-management.
Each owner tries to hire the best manager. Consequently this manager has to be proposed by the
competitive conditions and of course one of them is wage (we can also include here a social
package which is very popular in Ukraine now). Therefore, the salary can be distinguished like a
separate unit of expenditures. Moreover, summarizing, we find out the term as a managerial
style. Without any doubt the performance of the firm is dependent of the management. The
better management the more profit will firm get. Thus we can evaluate the costs which are
connected with reorganization and restructurisings. To prolong, the connection between high
salary and performance was studied by the Segunin 1996. In his article he separated general and
administrative expenses in two groups: non-discretionary (structural) and discretionary expenses.
The question arises is it really profitable to hire well-paid managers? How do the expenses of the
firm influences the firm value? The result was rather unexpected if we increase the volume of
general and administrative expenses as the component of managerial styles - this step will not be
associated with significantly levels of firm value. In contrast, it was found that higher levels of
the structural component are significantly negatively related to firm value.
Therefore, the owner of the company should think carefully about paying high salary increasing
in such a way G&A expenses. Thats sounds easy when we have to deal only with one person
who makes a decision.
After salary, the next problem which we can face is shareholders. To be more precise were more
interested in the blockholders or people who can block the any decision which is undertaken.
This is a crucial point in the management because other shareholders always have to keep in
mind the possibility of rejection and even an injunction.
The result of the existence of big shareholders (here big means that that shareholder can directly
influence the decision-making thus we get the controlling interest of an enterprise) can lead to
the serious problem of making a decision. One big shareholder can present with a fait accompli
the board of directs and forces to do only his decision. That is why some authors tried to
investigate the optimal value of shareholders power to reduce the probability of opportunism by
a single shareholder (Gomez and Novaes (2005)). Throughout this topic McConnel and
Servais (1990) investigated the relationship between the structure of ownership of the company
and Tobins Q. They found out that there exists a relation between Q and a part of the stock
which belongs to the corporate insiders.
Thus, we can say that ownership and control structure of the enterprise is a significant
determinant of its dividend payout policy that influences the firms value. We can look at this

case on the example of state-controlled firms in Austria. They smooth dividends, have large
target payout rations and are the most unwilling to cut dividends even taking into account big
amount of potentials costs of shareholders. But the decisions differ when we have a deal with a
family controlled firms have completely different dividend policy, they are more likely to cut
the dividends. In addition the owners (and often the most important shareholders) can adjust
dividend policy and investment priority pretty fast. This result was received by Gugler (2001).
Another conclusion was that dividends significantly negatively influence capital investment.
Then the shareholders, in turn, have to pay taxes because they get profit (dividends) from their
shares. Consequently, the value of the tax directly influences profoundly on the preferences of
the shareholders whether to have deposits or shares. This explains the interest of researches
which devoted their papers to this question. Harris and Kemsley (1999)(HK) investigated how
taxes on dividends affect the relative value of retained earnings versus contributed capital.
Furthermore, Collins and Kemsley (2000)(CK) observed the effect of dividend and capital
gains on firm value. Then Harris (2000)(H) showed the effect of dividend taxes and imputation
credit on firm value. The crucial point here is that all the authors (HK, CK, H) gave an
interpretation of their evidence as consistent with dividend taxes being fully capitalized.
Let us talk about the results of the Harris and Kemsley test: they found out that the coefficient on
retained earnings as compared to book value was negative (to be more precise -0.47) and they
interpreted it in the following way: an estimate of the dividend tax rate capitalized into prices,
so our results suggest the marginal investor faces an average dividend tax rate of 47% and they
even stated that dividend taxes are capitalized in the values of the shares.
However, this question was expanded and the aim was to investigate not only the problem of
capitalization but also how taxes are capitalized and to what extent are they capitalized in the
market values of the shares. That actually did Hanlon (2003) and disproved the result that was
received using the model by Harris and Kemsley.
We talked about shareholders and their profits, about the managers of the firm but there is a
crucial point which is left why some firms prefer to pay dividends rather than repurchase
shares? Sometimes institutional investors are less taxed then the private (individual) investors
this fact can lead to the ownership clientele effects. However, each firm has to decide the
strategy of paying dividends which can be separated into two parts: the optimal amount for
paying and the optimal times. Cadenillas A. et al (2004) modelled this as stochastic impulse
control problem and found the analytical solution. The result was that as the dividend tax rate
goes down it becomes optimal for the shareholders to receive smaller but more frequent dividend
The firms which pay out the dividends usually attract more institutions than those which do not
pay. This, in turn, presents the possibility of detecting the level of management (quality) and the
top firms. If we consider such a situation when we do not have any transaction costs and taxes
then share repurchasing and dividends are equivalent. As in many countries dividends are taxed
much higher than the capital gains, then logically to conclude that the share repurchasing is more
attractive and preferable.
However, dividends stay of one of the major and essential types of income. It should be pointed
that during last years 1973-1983 dividends of the largest 1000 US firms averaged 44 % at the
same time the repurchasing was only 6 percent. Then in 1984 repurchasing increased
significantly and kept its position rather constant but did not become a substitute for the

dividends. Throughout, looking at the period of 1984-1988 the picture changed significantly:
repurchasing increased from 6 up to 38% of earnings, dividends also went up from 44 to 51% .
That is to say Allen and Bernardo (Dec. 2000) constructed the model which explains the
preferences of an enterprise: whether to pay dividends rather than to repurchase shares or to
incline to smooth dividends. Their model was based on the two assumptions: there are groups of
investors who are taxed differently and another one is that dividends are one way of attracting
institutions. Looking at these assumptions it can be concluded that firms attract more institutions
as shareholders by paying out the dividends and moreover these firms (which pay dividends)
perform better than otherwise equal non-dividend-paying firms. The results of their research
proved these assumptions - dividend-paying firms perform better.
We can also talk about Profits, Dividends and Capital Expenditures (or CAPEX).
Looking on the sample of US enterprises we can find out that during last 50 years after-tax
profits increased at a compound annual rate of 6.6 percent, dividends grew at 7.3 percent, and
plant and equipment expenditures grew at 7.9 percent. The average payout rate over this period
was 52 percent.
Clearly, dividend payments are significant relative to the corporate earnings and investment.
Figures 1 and 2 describe the pattern of dividends versus after-tax profits and investments,
respectively. Looking at the pictures we can conclude that managers, at least in aggregate, appear
to continue to smooth dividend payments relative to earnings and capital expenditures.

TATA Motors:
Net Sales
Market Capitalisation
Capital Expenses
Cash and Cash Equivalents -0.002792638

Standard Error

t Stat


It can again be seen that the influence of Cash and cash Equivalents, Market Capitalization and
Capital Expenditure is negative and is also very insignificant. And the Net Sales also impact
negatively with a very minute coefficient of 0.002. There is a positive correlation between PAT
and DPR, the coefficient of 0.02 implies that a 1% change in Pat would lead to 0.02% change in
DPR, both negatively and positively.

For TATA Motors, if we look at EPS and DPS figures, from the graph we can get that the DPS
follows EPS. If EPS increases, company increases the DPS offered to the shareholders. Though
the increase is very small but still it is clearly visible. Moreover if the EPS falls then DPS also
falls. We can see from the graph that there are very high fluctuations in the EPS for the
company though over years it has after fluctuation come again to same level it was in 1995,
with a minute fall at -1.41% CAGR. But as a consequence, dividend payout also shows very
wide variations in the value over the years between 0% to around 110%. The average payout
ratio for the company over the years has been around 38%. It can also be inferred that The
Company pays same proportion of EPS as Dividends or it follows a Hybrid policy of fixed
proportion as dividend with extra dividend in case of increasing profits.

We have analyze the dividend policy, out of the five factors that we took, Net sales, Market
capitalization and PAT are the factors that affect the most to DPR. Also if we take EPS and DPS
into account then generally for Tata motors, we have found a trend that from 1995 to 2001, the
company generally followed constant dividend policy but after 2001 the dividends
were somewhat following EPS of the company. Though for companys the dividend policy was
constantly growing.


Investment Opportunities: More investment opportunities - > Lower Dividends

Stability in earnings: More stable earnings -> Higher Dividends
Alternative sources of capital: More alternative sources -> Higher Dividends
Constraints: More constraints imposed by bondholders and lenders -> Lower Dividends
Signaling Incentives: More options to supply information to financial markets - > Lower
need to pay dividends as signal
F. Stockholder characteristics: Older, poorer stockholders -> Higher dividends.
G. It is important to isolate who receives the dividend due to the stock price reaction
following the payment The stock should fall by the amount of the dividend with no
H. Retain the cash for investment in the firm. The company retains the cash and invests in
T-bills and pays out the proceeds 5 years from now. (Individuals pay the taxes at the
I. Share Repurchases & Signaling.

This paper was devoted to the issue of utmost importance to present day business environment
dividend policy and its impact on firm value. Combined with a number of other factors dividend
policy was positioned as a crucial element for determining the return on portfolio of a particular
enterprise. By modeling the behavior of the enterprise value we tried to reveal the most crucial
factors, to assess their contribution and to perceive the nature of their influence. By doing so we
obtained several interesting results.
The first and the most desirable conclusion basically concerns the payout policy itself.
Enterprises which preferred to distribute the spare part of an income between its shareholders on
average increases it value. The mechanism is quite simple reinvesting the dividends is a vague
and obscure treatment to the income which may appreciated by professionals, while paying a
dividend may attract a regular agent. This way the stock becomes more popular and its price
reacts accordingly. We have analyze the dividend policy, out of the five factors that we took, Net
sales, Market capitalization and PAT are the factors that affect the most to DPR. Also if we take
EPS and DPS into account then generally for Tata motors, we have found a trend that from 1995
to 2001, the company generally followed constant dividend policy but after 2001 the dividends
were somewhat following EPS of the company. Though for companys the dividend policy was
constantly growing.


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Journal of Finance, Vol. 55, No. 6, 2499-2536
Black F, Scholes M, (1974) The Effects of Dividend Yield and Dividend Policy on
Common Stock Prices and Returns. Journal of Financial Economics 1, p. 1-22
Brennan, M. (1970) Taxes, Market Valuation and Financial Policy. National Tax Jornal,
No 23, p. 417-429
Chew Donald H., JR, (1993), The new corporate finance. Where Theory Meets
Cadenillas A. et al (Dec., 2004) Optimal Dividend policy with mean-reverting cash
Dorfman, J. (11 November,1996), The power of Dow Dividends. The Wall Street
Journal, C1
Fama F., French R. (autumn 1998), Taxes, Financing Decisions, and Firm Value , The
Journal of Finance, vol. 53, .3, p.819-843
Francfurter, G., and R. Wood, Jr. (1997) The evolution of the Corporate dividend
Policy. Journal of Financial Education 23, p. 16-33

Tata Motors (all figures in crores)