Dividend Policy and Shareholder Value an Empirical Analysis

Abstract

This study examines the connection between shareholder value and dividend policy, providing an empirical analysis based on information from publicly listed firms. A key choice in financial management is dividend policy, which establishes how much of profits are given to shareholders as opposed to being reinvested. To comprehend differing viewpoints on how dividends affect stock prices and investor behaviour, the paper examines important theoretical frameworks, such as the dividend irrelevance theory, bird-in-hand theory, and signalling theory. The study uses quantitative analysis to look at how stock market volatility, corporate growth trajectories, and dividend payment ratios affect shareholder wealth. It also evaluates how industry variables, market dynamics, and company governance influence the formulation of successful dividend plans. The results seek to make clear how choosing dividends affects maximising shareholder value and provide guidance for creating corporate financial plans that are more successful. This research adds to the continuing conversations on the best dividend policies and how they affect the value of the company.