DIVIDEND POLICY

FINANCIAL MANAGEMENT

GROUP MEMBERS

• ROHIT SHETTY (P27)• AMIT JAIN (P02)• SONAY CHATTERJEE (P33)• DILIP SANKLECHA (P07)• ROSHAN GAMRE (P28)• PRASHANT MANAVE (P25)

Dividend Policy

• Dividend policy means …….

Policies in Practice

• Generous dividend and bonus policy

• Fixed dividend policy

• Erratic dividend policy

Types of Dividend

• Regular Dividend

• Interim Dividend

• Stock-Dividend

• Scrip Dividend

• Bond Dividends

• Property Dividend

Factors affecting dividend policy

• Stability of Earnings

• Age of corporation

• Liquidity of Funds

• Needs for Additional Capital

• Taxation Policy

Factors affecting dividend policy

• Government Policies

• Past dividend Rates

• Ability to Borrow

• Policy of Control

• Time for Payment of Dividend

Comparison of D/P Ratio and DPS

ITInfosysTech Mahindra

AutomobileMaruti SuzukiTata Motors

SteelBhushan SteelTata Steel

BankingHDFC BankICICI Bank

• 4 Industries and 2 companies each

IT INDUSTRY

IT INDUSTRY Accounts for 5.9% of the country's GDP as of

2009 The tertiary sector, employing more than 2.3

million people either directly or indirectly In March 2009, annual revenues from

outsourcing operations in India amounted to US$60 billion

Expected to increase to US$225 billion by 2020.

Year DPS (Rs.)

2005 11.50

2006 45.00

2007 11.50

2008 33.25

2009 23.50

Year DPS (Rs.)

2005 2.20

2006 8.80

2007 2.30

2008 5.50

2009 4.00

AUTOMOBILE INDUSTRY

Year DPS (Rs.)

2005 12.50

2006 15.00

2007 15.00

2008 13.00

2009 12.50

Year DPS (Rs.)

2005 3.50

2006 5.00

2007 4.50

2008 3.50

2009 2.00

STEEL INDUSTRY

STEEL INDUSTRY

• India’s steel production in 2009 to reach 13.17 Million Tonnes

• The steel sector derives most of its demand from auto and construction sector

TWO Players

Year DPS (Rs.)

2005 16.00

2006 16.00

2007 15.50

2008 13.00

2009 13.00

Year DPS (Rs.)

2005 2.50

2006 2.50

2007 2.50

2008 2.50

2009 2.50

BANKING INDUSTRY

BANKING INDUSTRY

Year DPS (Rs.)

2005 8.50

2006 8.50

2007 10.00

2008 11.00

2009 11.00

Year DPS (Rs.)

2005 4.50

2006 5.50

2007 7.00

2008 8.50

2009 10.00

Conclusion

• Dividend Policy Rate of earnings < Cost of Capital Rate of earnings = Cost of Capital Rate of earnings > Cost of Capital

References

• Chandra, Prasanna “Financial Management”• Khan & Jain “Financial Management”• http://finance.mapsofworld.com• http://www.investopedia.com• http://www.smcindiaonline.com• http://www.CartoonStock.com

Thank you!!!

“Rajan Madam”for your guidance