IMPACT OF DIVIDEND PAYOUT ON THE FIRM VALUE: A STUDY OF FIRMS LISTED ON NATIONAL STOCK EXCHANGE

Abstract

Maximization of firm value or shareholders wealth maximization is the prime objective of a firm. As the dividend payout decision is one of the important decisions, its impact on the firm value has been widely studied and researched topic in the area of corporate finance. In the present study the impact of dividend payout on the value of the firm has been examined on the sample of Nifty-100 index firms. Along with the Dividend Payout(DPR), Current year’s profit(CPR), Size(SIZE), Leverage(LEV), Growth Opportunities(GWOP), Market risk(Beta), Price-Earnings(PE) ratio and Age(AGE) have been considered in the model as independent variables. The result shows that, dividend payout positively related but not significantly influence on the value of the firm. Whereas, The Current year’s profit (CPR), Size (SIZE), Growth Opportunities (GWOP) and Price-Earnings (PE) are the variables significantly influence on the value of the firm. KEYWORDS: Dividend payout, value of the firm, shareholders, National Stock Exchange, market risk.