Abstract:
Dividend policy is a strategy used by a company to determine the amount and timing of dividend payments. The dividend policy framed by an organization is one of the crucial issues in corporate finance since it may have an impact on the firm’s value and shareholder wealth. The research study is an attempt to analyze the effect of dividend policy on shareholder wealth of thirty selected Indian banks listed and traded in Bombay Stock Exchange (BSE).For the purpose of study the financial data from the period 2003-04 to 2012-13 of selected Indian banks (15 Public and 15 Private) would be used. The data would be analyzed using statistical tools like multiple regression technique, t test, the coefficient of determination (R2) and F-Value. The results of the data analysis might reveal that that there is a significant effect of dividend policy on the share price of selected Indian Banks. The study is limited to a time period of 10 years and only selected Indian Banks. The result might change if the time period and number of banks are extended.
