CONTENTS

CHAPTER NO 1

TITLE OF THE CHAPTER INTRODUCTION 1.1 Introduction 1.2 Equity Instrument 1.3 Key Determinates Of Intrinsic Value 1.4 Dividend Decision And Valuation Of Firms 1.5 Dividends: A Recession Lifeline? 1.6 Background Of The Topic

PAGE NO

1 1-3 4-6 6-14 13-15 15

RESEARCH DESIGN 2.1 Introduction 2.2 Need for the study 2.3 Objectives Of The Study 2.4 Review Of Literature 2.5 Operational Definition Of Concepts 2.6 Scope Of The Study 2.7 Research Methodology 2.8 Limitations Of Study 2.9 Chapter Scheme PROFILE OF INDIAN ECONOMY AND AUTOMOBILE INDUSTRY 3.1 Introduction 3.2 Trends In Indian Automobile Industry 34 34-35 16 16 17 17-25 25-28 28 28-32 32 32-33

3.3 An Overview Of Indian Economy 4 ANALSIS AND INTERPRETATION OF DATA 4.1 Introduction 4.2 Primary Data Analysis 4.2.1 Objective 1: To identify various factors which determine the equity prices in a stock market which investors use as a cue for selection of securities and to find their relationship with dividend payout ratio of a company. 4.3 Secondary Data Analysis 4.3.1 Objective 2: To determine whether dividend yield of a stock is the best investment criteria in all market conditions 4.3.2 Objective 3: To find out whether dividends really reflect the good financial performance of company 4.3.3 Objective 4: To study the empirical relationship between equity share returns and various explanatory 5 variables SUMMARY OF FINDINGS, CONCLUSIONS AND SUGGESTIONS 5.1 Introduction 5.2 Summary Of Findings 5.3 Conclusions 5.4 Suggestions MY LEARNING BIBLIOGRAPHY ANNEXURE Questionnaire

35-41

38

38-55

55-64

65-70

71-77

78 78-82 82-85 85-86 86-87

LIST OF TABLES

TABLE NO 2.1 3.1 3.2 3.3 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10

CONTENTS Table showing the list of companies Table showing the list of NSE Indices Table showing the list of BSE Indices Behaviour of Economic Indicators and their

PAGE NO 32-33 42 43 45 47 48 of 48 49 of of 50 51 51 52

suggestive impact on the share market Table Showing Age Profile of Respondents Table Showing Gender of Respondents Table Showing Educational Qualification

Respondents Table Showing Occupation Pattern of Respondents Table Table Showing Showing Annual Average Average Annual Income Savings

Respondents Respondents Table Showing Average Annual Investment of Respondents Table Showing Percentage of Total Investment Made In Corporate Shares Table Showing the Span of Investment of Respondents in Corporate Shares Table Showing the Source of Information for Investment

53 54

Table Showing Basis of Respondents Investment 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 Decision Table Showing Basis of Respondents Investment Decision Table showing the percentage of respondents who read financial statements while making equity investment. Table Showing the Major Criteria for Equity Investment Table showing Chi-Square Calculated Value across Respondents Profile Table Showing Chi-Square Calculated Value across Respondents Profile Table Showing Chi-Square Calculated Value across Respondents Profile Table Showing the Ranking of Determinates of Stock Returns 2008 Table Showing the Ranking of Determinates of Stock Returns 2007 Table Showing the Ranking of Determinates of Stock Returns 2006 Table Showing the Ranking of Determinates of Stock Returns 2005 Table Showing the Ranking of Determinates of Stock Returns 2004 Table Showing the Ranking of Determinates of Stock Returns 2003 Table Showing the Ranking of Determinates of Stock Returns 2002 Table Showing Summary of Dividend Yield Ranking, R Square and F cal Table Showing Movement of Dividend and BSE Sensex 68 68 67 66 66 65 64 56 58 59 61 62 64 56 55

4.26

69

Table Showing Correlation Coefficient between 4.27 4.28 4.29 4.30 4.31 4.32 4.33 4.34 4.35 4.36 4.37 4.38 4.39 4.40 dividend payout ratio and determinates Table Showing Linear Regression Results for the Year 2008 Table Showing Linear Regression Results for the Year 2007 Table Showing Linear Regression Results for the Year 2006 Table Showing Linear Regression Results for the Year 2005 Table Showing Linear Regression Results for the Year 2004 Table Showing Linear Regression Results for the Year 2003 Table Showing Linear Regression Results for the Year 2002 Table Showing Linear Regression Results for the Year 2008 Table Showing Linear Regression Results for the Year 2007 Table Showing Linear Regression Results for the Year 2006 Table Showing Linear Regression Results for the Year 2005 Table Showing Linear Regression Results for the Year 2004 Table Showing Linear Regression Results for the Year 2003 79 80 81 82 83 78 76 75 75 74 72 72 73 73

LIST OF CHARTS AND GRAPHS

CHART/ GRAPH NO 3.1 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10

CONTENTS Graph Showing Sectorwise Brak Up of Companies Graph Showing Percentage of Different Age Groups of Respondents Graph Showing Educational Qualification of Respondents Graph Showing Occupation Pattern of Respondents Graph Showing the Source of Information for Investment Graph showing the factors influencing investment decision in stocks Graph Showing Investors Response about high dividend yield shares as a smart investment Graph Showing Investors Response about Performance of Dividend Based Investments Graph Showing Investors Response about Performance of Dividend Based Investments Graph showing movement of sensex from 1999-2008

PAGE NO 44 47 49 50 54 57 58 60 62 70

Graph showing movement of dividend of sample companies from 1999-2008

70

BIBLIOGRAPHY

BOOKS

Beri G C (2004), Statistics for Management, Tata Mcgraw-hill, 1 st Edition, pp 278-281 Chandra, Prasanna (2002), Managing Investments, Tata Mcgrawhill, 2nd Edition, pp156-159 Gupta, Shashi K And Gupta, Neeti (2008), Financial Management, Kalyani Publishers, pp 1.2 1.5 Ibid, 20.1 20.11 Pandey I M (2005) Financial Management, Vikas Publishing House Private Limited, 2005, 9th Edition, pp 379 - 395 RANGANATHAM M , MADHUMATHI R (2005), Investment Analysis and Portfoilio Management, Pearson Education, 1 st edition, pg 226

JOURNALS

Allen, Dave E And Rachim Veronica S (1996) , Dividend Policy And Stock Price Volatility: Australian Evidence, Applied Financial Economics, 6, pp 175-188 Baskin, Jonathan (1989), Dividend Policy And The Volatility Of Common Stock, Journal Of Portfolio Management, 15, 3, Spring, pp 19-25 International Monetary Fund outlook 2009 Kumar Sen, Dilip et al (2002) The Impact Of Dividends And Retained Earnings On The Market Price Of Shares: A Study Of Selected Enterprises Of The Pharmaceutical Industry In India, The Journal Of Accounting & Finance, 16, 2, April September, pp 43-49 Manoj Anand (2002), Factors Influencing Dividend Policy Decisions of Corporate India, The ICFAI Journal of Applied Finance, 2004

Mathew P A (1999), Indian Stock Markets: Empirical Evidence On The Information Content Of Dividend Hypothesis, Journal Of Accounting & Finance, 13, 2, September, pp 51-65 SINGHANIA, MONICA (2006), Determinants of Equity Prices: A Study Of Select Indian Companies, The ICFAI Journal of Applied Finance, 2004

SINGHANIA, MONICA (2007), Dividend Policy of Indian Companies, The ICFAI University Press, 2007

Terence M. Ryan (1974), Dividend Policy And Market Valuation In British Industry, Journal Of Business Finance & Accounting, 1, 3, pp 415 - 428

NEWSPAPERS

Business Standard Research Bureau (2004), High Dividend Yield Stocks Are Good Bets, Business Standard (Mumbai), 21st April ET Bureau (2008), High-Dividend Yield Stocks Aren't The Best Bets Always, Economic Times(Bangalore), 5th September 'GDP GROWTH' -The Economic Times dated 31st May 2008 VENKATARAMAN, SHANTH (2008), Buying on dividend yield does not always pay, The Hindu Business Line (Mumbai) 7th August

WEBSITES

Ghosh, Saurabh And Ghosh, Arijit (2002) Do Leverage, Dividend Policy And Profitability Influence The Future Value Of Firm? Evidence From India, Http://Ssrn.Com/Abstract=1158251. Government of India Union Budget and Economic Survey 2008-09 (http://www.indiabudget.nic.in)

http://en.wikipedia.org/wiki/Image:IndianEconomicForecast.SVG

http://www.economywatch.com/indianeconomy/indian-economyoverview.html http://www.ingim.com/EU/MarketCommentary/index.htm Kevin C H Chiang (2008), High Dividend Yield Does Predict Lower Dividend Growth: A Natural Experiment, Http://Ssrn.Com/Abstract=1107192

OSENI, JIMOH EZEKIEL, Determinants of Equity Prices in the Stock Markets, http://ssrn.com/abstract=1035204 SHARMA, SHEFALI AND SINGH, BALWINDER (2006),

Determinants of Equity Share Prices in the Indian Corporate Sector: An Empirical Study, http://ssrn.com/abstract=1093209

UPANANDA PANI (2008), Dividend Policy and Stock Price Behaviour in Indian Corporate Sector: A Panel Data Approach, www.ssrn.com=1098273 www.bseindia.com www.capitaline.com www.googlefinance.com www.investopedia.com www.nseindia.com www.yahoofinance.com