IMPACT OF DIVIDEND POLICY ON SHAREHOLDER’S WEALTH IN POWER GENERATION AND DISTRIBUTION FIRMS IN PAKISTAN

Abstract

This article investigates the effect of dividend policy on shareholder wealth inside the energy generation and distribution corporations in Pakistan. The examination is carried out using a pattern of 12 organizations listed on the Pakistan Stock Exchange in the course of 2013-2017. The research employs both descriptive information and panel facts regression analysis to examine the relationship between dividend policy and shareholder wealth. The results endorse that dividend policy has a substantial effect on shareholder wealth in the strong technology and distribution companies in Pakistan. The findings reveal that corporations with an excessive dividend payout ratio generate better returns for their shareholders. Furthermore, the studies additionally examine the impact of other firm-particular elements, along with company size, income consistent with percentage, and rate-to-profits ratio, on shareholder wealth. The outcomes propose that those factors also have a widespread superb effect on shareholder wealth. The study has crucial implications for each investor and companies within the electricity technology and distribution area in Pakistan. The findings recommend that firms ought to adopt a dividend policy that maximizes shareholder wealth. This may be accomplished by way of preserving a high dividend payout ratio and making sure that the company-particular elements that impact shareholder wealth also are well-managed. The research also highlights the significance of understanding the specific characteristics of the power generation and distribution zone in Pakistan while developing a dividend policy. This region is noticeably regulated and challenges government rules, which may impact the financial performance of corporations in this sector. Therefore, firms running on this zone should carefully bear in mind the impact of regulatory and policy adjustments when developing their dividend policy.