Impact of dividend policy on shareholders wealth : a comparative study among dividend paying and non-paying technology based firm’s in USA
Date
2017-08-01
Journal Title
Journal ISSN
Volume Title
Publisher
Elite Hall Publishing House
Abstract
The purpose of this study is to investigate the impact of Dividend Policy on Shareholders Wealth in Technology Companies of USA. The research is carried on 60 companies divided into two Strata’s of Paying and Not Paying Dividend listed under Technology sector at NYSE and AMEX stock exchanges which covered the period of 2010-2014, total observations of 150 firms-years. The dependent variable are Lagged Price Ratio, Capital Gain Yield Ratio and Return on Equity and independent variables is Dividend Payout Ratio. The data was analysed using E-views software. The research employed correlation coefficient and linear regression analysis and the findings shows independent variable (Dividend payout ratio) place no significant impact on all three Dependent Variables in Strata 1 of paying Dividend companies. While in Strata 2 of Not paying Dividend, Dividend payout ratio place no significant impact on Lagged price ratio and Return on Equity whereas, places significant positive impact on Capital Gain Yield Ratio. Therefore, only Capital Gain Yield Ratio is found to be positively correlated with dividend payout ratio in Strata 2.