Abstract
In the field of corporate finance the question as to whether dividend policy affects the shareholders wealth still remains unresolved. The objective of this research paper is to establish the impac...
Highlights
In Pakistani economy, privatization, liberalization, and globalization together with rapid strides of information technology, have acquired serious rivalry in all fields of business
Research objectives The objectives of this research are to explore the extent of association between dividend policy and share market price; between dividend policy and earning per share; and between dividend policy and firm performance
The results report that there is a positive association between share price and the dividend policy (DYβ = 0.69, p = 0.00; DPS-β = 0.041, p = 0.03) that means there is a positive relationship between dividend policy and shareholders wealth
Summary
In Pakistani economy, privatization, liberalization, and globalization together with rapid strides of information technology, have acquired serious rivalry in all fields of business. This has made Pakistani firms confused, apprehensive, dazed, and anxious. Profit being the main economic drive for firms, can be attributed to two main destinations: it can be held in the firm to be used for its future growth, or can be distributed to shareholders. This distribution can be done in the form of dividends or through repurchasing circulating shares. Firms need to create a dividend policy in order to determine whether or not to pay dividends and how
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