A Financial Study on the Effect of Dividends on a Company's Performance

Abstract

The study on the effects of dividend payout on company performance selected Infosys, Bajaj Auto, Reliance Industry, HDFC, and Bajaj Finance companies with fifteen years of financial data from 2006 to 2020, using the three types of regression models like fixed effect, random effect, and general least square model similarly. The study followed three main objectives, each requiring the consideration of three hypotheses. In connection with the first objective, the study concluded that there is a significant and positive association between dividends and earnings per share. Secondly, the study explains that with the connection of statistical data analysis in considering the sample data, there is a significant and positive association between dividend and return on equity. The third objective of the study also focused on the fact that there is a significant and positive association between return on equity and dividend. All the empirical studies also support the past study, which is related to dividend payout and corporate performance, and consider the literature review of the study. The study concluded that based on the considered data and period of the study and statistical output, the dividend payout plays a crucial role as a performance taker of any firm.