Professional Documents
Culture Documents
report there are 24 companies taken for more better and good result to count down that it perfectly affected or
not. These 24 companies taken at simple random process because we choose any company and it must paid
dividend to shareholder more or less it doesn’t matter and with the use of 24 companies find out mean,
standard deviation and t value for perfect reason that it impact on share price yet or not.
All 24 companies having closing price and all the calculation based on closing price so after and before of
dividend announcement it include. It helpful to invest on right securities.
A dividend is the distribution of reward from a portion of the company’s earnings and is paid to a class of its
shareholders. Dividends are decided and managed by the company’s board of directors, though they must be
approved by the shareholders through their voting rights. Dividend can be issued as cash payment, as shares of
stock, or other property, though cash dividends are the most common. Along with companies, various mutual
funds and exchange traded funds also pay dividends.
Basics of a dividend
A dividend is a token reward paid to the shareholders for their investment in a company’s equity, and it usually
originates from the company’s net profits. While the major portion of the profits is kept within the company as
retained earnings, which represent the money to used for the company’s ongoing and future business activities,
the remainder can be allocated to the shareholders as a dividend. However, at times, companies may still make
dividend payments even when they don’t make suitable profits. They may do so to maintain their established
track record of making regular dividend payments.
The board of directors can choose to issue dividends over various time frames and with different payout rates.
Dividends can be paid at a scheduled frequency, like monthly, quarterly or annually.
Key Takeaways
Dividends are payments made by publicly-listed companies or funds as a reward to investors for
putting their money into the venture. They can be paid as cash or in the form of stock.
Announcements of dividend payouts are generally accompanied by a proportional increase or decrease
in a company’s stock price.
Investors can use models, such as the dividend discount model or Gordon growth model, to find
dividend-paying instruments.
Dividend payment procedure follows a chronological order of events and the associated dates are important to
determine the shareholders who qualify for receiving the dividend payment.
Announcement Date: Dividends are announced by company management on the announcement date,
and must be approved by the shareholders before they can be paid.
Ex-dividend Date: The date on which the dividend eligibility expires is called the ex-dividend date or
simply the ex-date. For instance, if a stock has an ex-date of Monday, May 5, then shareholder who buy
the stock on or after that day NOT qualify to get the dividend as they are buying it on or after the
dividend expiry date. Shareholders who own the stock one business day prior to the ex-date that is on
Friday, May 2, or earlier will receive the dividend.
Record Date: The record date is the cut-off date, established by the company in order to determine
which shareholders are eligible to receive a dividend or distribution.
Payment Date: The company issues the payment of the dividend on the payment date, which is when
the money gets credited to investors’ accounts.
Since dividends are irreversible, their payments lead to money going out of the company’s books and accounts
of the business forever. Therefore, dividend payments impact share price – it rises on the announcement
approximately by the amount of dividend declared and declines by a similar amount at the opening session of
the ex-date. Say a company is trading at$70 per share and it declares a $2 dividend on the announcement date.
As soon as the news becomes public, the share price will shoot up by around $2 and hit $72. Say the stock
trades at $73 one business day prior to the ex-date. On the ex-date, it will come down by a similar $2 and will
start at $71 at the start of the trading session on the ex-date, because anyone buying on the ex-date will not
receive the dividend.
Companies pay dividends for a variety of reasons, those reasons can have different implications and
interpretations for investors.
Dividends are expected by the shareholders as a reward for their trust in a company and the company
management aims to honor this sentiment by delivering a robust track record of dividend payments. Dividend
payments reflect positively on a company and help maintain investors’ trust. Dividends are also preferred by
shareholders as they are treated as tax-free income for shareholders in many jurisdictions, while capital gains
realized through the sale of a share whose price has increased is taxable. Traders who look for short-term gains
may also prefer getting dividend payments that offer instant tax-free gains.
A high-value dividend declaration can indicate that the company is doing well and has generated good profits.
But it can also indicate that the company does not have suitable projects to generate better returns. Therefore, it
is utilizing its cash to pay shareholders instead of reinvesting it into growth.
If a company has a long history of past dividend payments, reducing or eliminating the dividend amount may
signal to investors that the company could be in trouble. The announcement of a 50% decrease in dividends
from General Electric Co. (GE), one of the biggest American industrial companies, was accompanied by a
decline of more than seven percent in GE’s stock price on November 13, 2017.
A reduction in dividend amount or a decision against making any dividend payment may not necessarily
translate into bad news about a company. It may be possible that the company's management has better plans
for investing the money, given its financials and operations. For example, a company's management may
choose to invest in a high return project that has the potential to magnify returns for shareholders in the long
run as compared to the petty gains they will realize through dividend payments.
Dividends paid by funds are different from dividends paid by companies. Funds for company dividends usually
come from profits that are generated from the company's business operations. Funds work on the principle of
net asset value. which reflects the valuation of their holdings or the price of the asset a fund may be tracking.
Since funds don’t have any intrinsic profits, they pay dividends that are sourced from their NAV.
Due to the NAV-based working of funds, regular and high-frequency dividend payments should not be
misunderstood as a stellar performance by the fund. Say a bond investing fund may pay monthly dividends as
it receives money in the form of monthly interest on its interest-bearing holdings. It is merely transferring the
interest income fully or partially to the fund investors. A stock investing fund may also pay dividends, which
may come from the dividend it receives from the stocks held in its portfolio, or by selling a certain quantity of
stocks. Essentially. the investors receiving the dividend from the fund are reducing their holding value, which
gets reflected in the reduced NAV on the ex-date.
Economists Merton Miller and Franco Modigliani argued that a company's dividend policy is irrelevant and it
has no effect on the price of a firm's stock or its cost of capital. Theoretically, a shareholder may remain
indifferent to a company's dividend policy. In the case of high dividend payments, they can use the cash
received to buy more shares. In the case of low payments, they can sell some shares to get the necessary cash
they need. In either case, the combination of the value of an investment in the company and the cash they hold
will remain the same. Miller and Modigliani thus conclude that dividends are irrelevant, and investors
shouldn't care about the firm's dividend policy since they can create their own synthetically.
However, in reality, dividends allow money to be made available to shareholders, which gives them the liberty
to derive more utility out of it. They can invest in another financial security and reap higher returns, or spend
on leisure and other utilities. Additionally, costs like taxes, brokerages, and indivisible shares make dividends a
considerable utility in the real world.
Dividends can help to offset costs from your broker and your taxes. This can make dividend investments even
more attractive. Of course, to get invested in dividend earning assets, one would need a stockbroker.
Investors seeking dividend investments have a number of options including stocks, mutual funds, ETFs and
more. The dividend discount model or the Gordon growth model can be helpful in choosing stock investments.
These techniques rely on anticipated future dividend streams to value shares.
To compare multiple stocks based on their dividend payment performance, investors can use the dividend yield
factor which measures the dividend in terms of percent of the current market price of the company's share. The
dividend rate can also be quoted in terms of the dollar amount each share receives. In addition to dividend
yield, another important performance measure to assess the returns generated from a particular investment is
the total return factor which accounts for interest, dividends, and increases in share price, among other capital
gains.
Tax is another important consideration when investing for dividend gains, Investors in high tax brackets are
observed to prefer dividend-paying stocks if the jurisdiction allows zero- or comparatively lower tax on
dividends than the normal rates, For example, the U.S. and Canada have a lower tax on dividend income for
shareholders, while dividend gains are tax-exempt in India.
1) RESEARCH
Business research is the process to find out unknown variable related to business decisions or to find out so
far unknown relationship between known or unknown variables.
2) RESEARCH HYPOTHESIS
H0: There is no significant relation between dividend announcement and nifty 50.
3) OBJECTIVE
3.2) To find out changes in share price before or after announcement of dividend.
4) RESEARCH DESIGN
Research design is the framework of conducting research for a project. It specifies all the details of
procedures necessary for obtaining, processing and analyzing the information needed to exactly define the
research problem and to solve that research problem.
y
x
l
D
v
p
c
S
u
f
O
d
o
h
t
n
m
e
r
g
a
s
i
E
R
L
C
A
M
Figure 3. 1. Research Design
An exploratory design is conducted about a research problem when there are few or no earlier studies to refer
to or rely upon to predict an outcome. The focus is a gaining insights and familiarity for later investigation or
undertaken where research problem is in preliminary stage of investigation.
4.2) CONCLUSIVE RESEARCH DESIGN
Conclusive research design as the name implies is applied to generate finding stature practically useful in
reaching conclusion or decision making. Conclusive research design usually involves the application of
quantitative methods of data collection and data analysis.
Conclusive research is more likely to use statically tests, advanced analytical techniques, and larger sample
sizes compared with explorative studies. Conclusive research is more likely to use quantitative, rather than
qualitative techniques.
Descriptive research designs help provide answers to the questions of who, what, when, where, and how
associated with a particular research problem; a descriptive study cannot conclusive ascertain answer to why.
Descriptive research is used to obtain information concerning the current status of the phenomena and to
describe “what exists” with respect to variables or conditions institutions.
Causality studies may be thought of as understanding in term of conditional statements in the form, “If X, then
Y”, this type of research is used to measure what impact a specific change will have on existing norms and
assumptions. Most social scientists seek explanations that reflect tests of hypothesis. Causal effect occurs when
variation in one phenomenon, an independent variable, leads to or results, on average, in variation in another
phenomenon, the dependent variable.
The data collection is a process by which the researcher collects the information from all the relevant
sources to find answers to the research problem, test the hypothesis and evaluates the outcomes.
The choice of data collection methods depends on the research problem under study, the research design
and the following gathered about the variable.
5.1) SOURCES OF DATA
u
o
r
S
P
m
i
e
n
o
c
S e
y
r
c
a
y
r
a
d
t
a
D
O
D
ft
t
a a
The primary data are the first hand data, collected by the researcher for the first time and is original in
nature. The researcher collects the fresh data when the research problem is unique, and no related research
work is done by any other person.
When the data are collected by someone else for a purpose other than the researcher’s current project and
has already undergone the statistical analysis is called as secondary data. This report contains both primary
as well as secondary data.
In this report the probability technique of simple random sampling method has been used.
DATE
No. COMPANY NAME
ANNOUNCEMENT EFFECTIVE
1 Asian paint 26/06/2020 23/07/2020
0
-
-
A
AVG OF 100 AVG AVG AVG AVG AVG AVG AVG ANNOUNCEMEN AVG AVG AVG AVG OF AVG OF AVG OF
DAYS OF -40 OF-30 OF -20 OF -10 OF -5 OF -3 OF -1 T DAY OF +1 OF +3 OF +5 +10 +20 +30
-0.05 -0.2 0.26 0.14 0.48 1.11 0.74 -3.40 -0.13 0.31 0.02 0.11 0.1 0.25 0.18
-0.34 0.34 0.05 0.51 1.42 0.55 0.09 -3.20 2.60 0.64 -0.30 -0.60 -0.6 -0.10 -0.10 0.10
-0.17 -0.30 -0.30 -0.40 -0.6 -0.70 0.36 -0.40 0.92 -2.2 -2.90 -3.50 -3.1 -1.70 -0.80 0.50
0.02 -0.10 -0.04 -0.01 -0.3 -0.50 -0.10 -0.80 -2.81 -1.10 0.49 -1.30 -1.5 -2.20 -0.70 0.40
0.19 0.34 0.54 0.76 0.45 0.35 0.72 0.05 -1.58 0.46 -0.30 -1.90 -1.8 -3.30 -2.10 2.10
-0.01 0.12 0.34 0.28 0.16 1.57 0.57 -0.90 1.21 -0.2 0.15 -0.10 0.06 0.53 0.13 .05
0.51 0.47 0.74 0.84 1.36 1.85 1.90 2.24 -1.81 -2.60 -0.30 0.20 -0.6 -0.10 -0.10 .07
-0.09 -0.20 -0.3 -0.30 -0.2 -0.70 -0.90 -2.40 -3.98 -3.20 -1.60 -0.80 -0.2 0.18 0.21 0.04
0.06 -0.10 -0.2 -0.20 0 0.03 0.03 2.60 -2.66 -1.30 -1.10 -1.60 -0 -0.80 0.54 .80
0.15 0 -0.1 0.11 -0.40 0.60 0.26 -2.20 0.48 5.33 3.53 2.28 1.03 -0.20 -0.20 0.30
0.31 0.71 0.57 -0.20 -0.40 -0.4 -0.30 0.55 5.54 -1.60 -0.40 -0.10 0.22 0.12 0.01 .15
-0.07 -0.30 -0.6 -0.50 -0.04 1 1.20 0.80 -0.74 -5.10 -2.5 -2.14 -2.01 -1.4 -0.70 0.60
0.10 0.63 0.26 -0.10 -0.60 1.33 -0.70 -2.30 5.90 3.43 3.09 1.60 0.88 0.51 0.55 Company
0.29 0.61 0.82 0.21 -0.80 -0.60 1.90 -3.40 1.23 0.92 1.19 0.62 0.25 -0.10 0.21 ASIANPAINT
L&T
0.58 0.66 0.75 0.83 1.31 -0.90 -2.70 -3.80 -0.80 0.32 -0.10 -0.60 -0.20 -0.20 0.04
ADANIPORTS
0.05 -0.10 -0.10 -0.40 -0.20 -0.20 -1.50 -3.40 -1.50 -0.20 -0.50 -0.50 -0.20 -0.10 -1.60
BAJAJ-AUTO
0.75 0.82 0.97 1.03 0.49 1.20 1.85 0.13 -4.10 0.20 0.07 0.13 0.71 0.61 0.31
BAJAJ
FINANCE
-0.03 0.08 0.18 0.31 0.37 0.30 1.26 -0.20 -0.50 -0.50 0.03 -0.60 0.01 -0.10 0.19
BPCL
0.34 0.05 0.04 0.23 0.03 -0.50 1.57 -0.10 -3.80 -1.70 -1.30 0.16 0.26 0.17 0.21
INFOSYS
-0.02 -0.30 -0.40 -0.60 -0.90 -1.80 -0.90 -2.10 0.33 0.25 1.20 0.90 0.61 0.61 0.3
BRITANNIA
-0.20 0.14 -0.40 0.94 -0.10 -1.40 -2.5 1.48 5.24 3.91 1.53 1.73 0.78 0.12 -0.01
CIPLA
0.06 0.98 1.46 2.16 0.91 0.23 -0.10 2.70 -2.10 -0.1 1.27 -0.10 0.18 0.32 0.40
COALINDIA
0.53 0.69 0.18 -0.04 -1.30 -0.80 2.83 1.18 -1.11 1.75 2.44 1.63 0.92 0.69 0.50 DRREDDY
0.28 0.29 0.32 0.52 0.25 0 -0.70 -1.60 2.26 2.58 1.15 1.27 0.42 0.36 0.03 EICHER
MOTORS
E - 20 E - 10 E-5 E-3 E-1 E E+1 E+3 E+5 E+10 E+20 E+30 E+40
JSWSTEEL -0.50
-0.15 0.06 0.29 -0.4 -1.7 1.87 -0.9 0.61 0.18 0 0.41 0.45 0.38
-0.1 -0.15 0.23 0.58 0.91 0.16 -0.4 1.21 0.51 0.86 0.16 -0 -0.1
-1.23 -1.89 -3.5 -3.2 1.76 -11.3 2.18 -0.4 -4.6 -0.38 0.13 0.06 0.29 GRASIM -0.20
-0.59 -1.19 -1.3 -1.8 -3.4 -3.65 0.71 0.53 -0.8 -2.16 -1.4 -0.5 -0.2
0.1 -0.92 -1.9 -3.3 -2.4 2.12 -3.8 -1.8 -2 -3.75 -3.5 -2.5 -1.9 HCL TECH 0.36
0.1 0.24 -0.1 -0.3 -0.3 -1.51 4.86 0.87 1.27 1.25 0.18 0.14 0.08
0.58 0.71 -0.1 -0.3 -0.1 1.03 0.95 -0.4 -0.8 -0.68 -0.1 0.01 0.06 HDFC BANK 0.12
-0.35 -0.71 -0.3 -0.8 -0.5 -0.16 -0.3 -0.7 -0.2 -0.48 0.2 0.02 0.27
-0.56 -0.97 -1.6 -3.3 -2.01 -2.97 4.72 0.24 0.6 1.81 2.25 1.51 1.25 HERO
LTD 0.01
0.46 -0.37 -0.2 -0.6 -0.3 -2.42 -0.8 -2.3 -1.6 -1.2 -1.02 -1.04 -0.9 MOTOCROP
-0.13 -0.24 -0.1 0.71 0.23 -0.15 2.12 2.09 0.96 0.29 0.92 0.46 0.31
HINDUSTAN
-0.75 -1.14 -2.1 -3.4 -2.8 -0.87 -0.9 -1.9 -0.4 -1.71 -0.5 -0.2 -0.2 0.06
UNILEVER LTD
-0.16 -0.17 -0.2 0.28 -1.8 1.46 -1.5 0.63 0.47 0.65 0.65 1.1 0.83
0.61 0.76 0.2 0.41 0.33 -0.98 2.64 0.38 0.33 0.29 0.37 0.48 0.43 ICICI BANK 0.12
0.45 0.21 -1.1 0.32 1.55 -0.6 -0.8 -1.3 -1.7 -0.49 -0.2 -0.2 -0.04
-0.5 -0.63 -0.3 -0.4 -0 -1.33 -0.3 -0.5 0.1 -0.07 -0.14 -0.1 -1.5 NTPC -0.10
0.44 0.49 0.09 0.47 -2.2 -2.77 -1.01 0.03 0.04 0.38 0.75 0.29 0.19
0.27 0.18 0.03 -0.01 0.46 -0.57 -2.31 -1.5 -1.01 -0.15 -0.1 0.27 0.26
ONGC 0.31
-0.24 -0.62 -0.8 -1.1 -2.01 0.29 0.11 -0.2 0.85 -0.22 0.01 -0.2 0.04
-0.02 0.9 0.59 0.12 -0.1 -2.59 -1.4 0.24 1.22 1.04 0.57 0.23 0.05
0.29 1.11 0.54 1.41 1.33 -1.46 1.33 1.29 2.11 1.09 0.37 0.04 -0.1 RELIANCE -0.10
0.6 0.73 0.11 -0.1 1.95 1.3 1.55 1.17 0.71 0.46 0.9 0.62 0.45
0.44 0.8 0.74 0.74 1.57 -0.15 -1.5 -0.1 -0.2 0.03 0.28 0.02 0.04 UPL -0.50
0.67 0.82 0.69 0.4 -0.5 2.86 -0.5 0.1 0.14 -0.44 -0.1 -0.4 -0.2
0.04 -0.05 -0.10 -0.20 -0.20 -0.59 -0.37 0.07 0.12 -0.03 0.17 0.03 0.06 TCS 0.24
0.50 0.80 1.03 1.40 1.69 2.79 2.05 1.10 1.37 1.19 1.02 0.74 0.65
E - 30
-0.15
-0.85
-0.35
-0.33
-0.47
-0.14
-0.73
-0.25
-0.05
0.12
0.16
0.19
0.68
0.53
0.39
0.49
0.54
0.08
0.04
0.31
0.35
0.49
0.14
0.43
0.4
0.7
E - 40
-0.08
-0.72
-0.21
-0.32
-0.51
-0.69
-0.21
-0.03
-0.12
0.12
0.22
0.15
0.43
0.08
0.11
0.26
0.21
0.44
0.47
0.07
0.12
0.43
0.19
0.42
0.12
0.34
nMea
S.D.
NO. COMPANY MEAN S.D.
1 Asian paint 0.12 0.77
Dividend announcement increases the participation of traders and also liquidity. Though the number of shares
increased the profits remain the same. Thus Earnings Per Share (EPS) will decline. Conceptually, When EPS
declines, proportionately the security price should also decrease. The present study is to evaluate the impact of
dividend on security prices. To test the change influence on security price 20 companies are selected from NSE
respectively.
1. REFERENCE BOOKS
Malhotra N.K., (2007), “Marketing Research”, 5th Edition, New Delhi, Kindersley (India) Pvt.
Ltd, Page no. 79,80,81,82,106,340,346.
Khan M Y., (2008), “Financial Management”, 5th Edition, New Delhi, Page no. 30.4, 30.5, 31.1,
31.2.
2. WEBSITES
https://www.nseindia.com
https://www.nseindia.com/market-data/live-equity-market?symbol=NIFTY%2050
Symbol Series Date Close Price %
ASIANPAINT EQ 02/06/2020 1709.3 0.95%
ASIANPAINT EQ 03/06/2020 1716.55 0.42%
ASIANPAINT EQ 04/06/2020 1633.75 -4.94%
ASIANPAINT EQ 05/06/2020 1638.55 0.29%
ASIANPAINT EQ 08/06/2020 1634.25 -0.26%
ASIANPAINT EQ 09/06/2020 1642.05 0.48%
ASIANPAINT EQ 10/06/2020 1635.95 -0.37%
ASIANPAINT EQ 11/06/2020 1610.6 -1.56%
ASIANPAINT EQ 12/06/2020 1637.35 1.65%
ASIANPAINT EQ 15/06/2020 1618.2 -1.18%
ASIANPAINT EQ 16/06/2020 1621.7 0.22%
ASIANPAINT EQ 17/06/2020 1595.4 -1.64%
ASIANPAINT EQ 18/06/2020 1597.8 0.15%
ASIANPAINT EQ 19/06/2020 1622.5 1.53%
ASIANPAINT EQ 22/06/2020 1652.15 1.81%
ASIANPAINT EQ 23/06/2020 1683.9 1.90%
ASIANPAINT EQ 24/06/2020 1747.25 3.69%
ASIANPAINT EQ 25/06/2020 1689 -3.39%
ASIANPAINT EQ 26/06/2020 1686.75 -0.13%
ASIANPAINT EQ 29/06/2020 1691.95 0.31%
ASIANPAINT EQ 30/06/2020 1687.45 -0.27%
ASIANPAINT EQ 01/07/2020 1688 0.03%
ASIANPAINT EQ 02/07/2020 1686.45 -0.09%
ASIANPAINT EQ 03/07/2020 1695.65 0.54%
ASIANPAINT EQ 06/07/2020 1708.85 0.78%
ASIANPAINT EQ 07/07/2020 1745.75 2.14%
ASIANPAINT EQ 08/07/2020 1686.25 -3.47%
ASIANPAINT EQ 09/07/2020 1717.25 1.82%
ASIANPAINT EQ 10/07/2020 1703.5 -0.80%
ASIANPAINT EQ 13/07/2020 1705.65 0.13%
ASIANPAINT EQ 14/07/2020 1688.4 -1.02%
ASIANPAINT EQ 15/07/2020 1671.65 -1.00%
ASIANPAINT EQ 16/07/2020 1693.2 1.28%
ASIANPAINT EQ 17/07/2020 1717.9 1.45%
ASIANPAINT EQ 20/07/2020 1751.6 1.94%
ASIANPAINT EQ 21/07/2020 1724.25 -1.57%
ASIANPAINT EQ 22/07/2020 1695.75 -1.67%
ASIANPAINT EQ 23/07/2020 1727.8 1.87%
ASIANPAINT EQ 24/07/2020 1712.05 -0.92%
ASIANPAINT EQ 27/07/2020 1778.15 3.79%
ASIANPAINT EQ 28/07/2020 1759.65 -1.05%
ASIANPAINT EQ 29/07/2020 1740.15 -1.11%
ASIANPAINT EQ 30/07/2020 1743.35 0.18%
ASIANPAINT EQ 31/07/2020 1715.5 -1.61%