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STRATEGIC ARCHIT
FINANCIAL
1411406
5 BBA A
MANAGEMENT
CIA - 3
Mines and collieries in India give the Company a distinct advantage in raw material sourcing.
Iron Ore mines are located at Noamundi (Jharkhand) and Joda (Odisha) both located within a
distance of 150 km from Jamshedpur. The Companys captive coal mines are located at Jharia
and West Bokaro (Jharkhand
DIVIDEND POLICY
The Company recommended a dividend of `8 per Ordinary Share on 97,12,15,439 Ordinary
Shares of `10 each for the year ended March 31, 2016. (Financial Year 2014-15: `8 per
Ordinary Share on 97,12,15,439 Ordinary Shares of `10 each).
The dividend on Ordinary Shares was subject to the approval of the shareholders at the
Annual General Meeting (AGM) scheduled to be held on August 12, 2016. The dividend will
be paid on August 16, 2016. The total dividend pay-out works out to 19% (Financial Year
2014-15:14%) of the net profit for the standalone results.
Effective
Date
26-05-2016
Date
Type
28-07-2016 Final
20-05-2015
23-07-2015 Final
share(80%)Dividend
80% Rs.8.0000 per
14-07-2014 Final
share(80%)Dividend
100% Rs.10.0000 per
23-05-2013
15-07-2013 Final
share(100%)Dividen
80% Rs.8.0000 per
18-05-2012
26-05-2011
27-05-2010
25-06-2009
26-06-2008
17-05-2007
16-07-2012
04-07-2011
12-07-2010
06-07-2009
18-07-2008
08-06-2007
14-05-2014
Dividend
Final
Final
Final
Final
Final
Final
Dividend(%
Remarks
Column
1
share(80%)Dividend
120%
120%
80%
160%
160% AGM
155% 155% Dividend ( 130%
for the year 2006-07
and special dividend of
25% on occasion of the
2
26-05-2006
07-06-2005
08-06-2004
09-06-2003
28-06-2002
28-05-2002
24-05-2001
Final
Final
Final
Final
Final
Interim
Final
Interim
Final
Final
Final
130%
130%
100%
80%
N.A.%
company.)
AGM
AGM
AGM
AGM
Nil Final Dividend
40%
50% AGM
40%
40% AGM & Dividend
40%
45% Dividend Declared
Mar ' 16
Mar ' 15
Mar ' 14
Mar ' 13
Mar ' 12
66.76
86.66
50.46
70.37
46.83
67.4
66.3
86.87
67.48
87.34
66.02
85.88
59.08
75.97
52.13
69.02
63.69
75.54
68.95
80.8
15.85
12.06
15.14
17.88
17.4
profit)
Dividend payout ratio (cash
11.36
9.2
11.64
13.51
14.85
profit)
The dividend payout ratio is the amount of dividends paid to shareholders relative to
Prices
Date
Open
High
Low
Close
Volume
Adj
Aug, 2016
02-Aug-16
01-Aug-16
364.65
366.45
356.15
366.45
370.7
366.6
354.9
360.1
354.2
358.05
361.85
364.85
57,46,700
81,08,000
100,82,30
Close*
358.05
361.85
364.85
359
5
351.0
355.05
0
83,49,200
355.05
359.2
5
348.6
349.85
105,26,70
349.85
29-Jul-16
351.05
28-Jul-16
358
28-Jul-16
27-Jul-16
8.00 Dividend
368.9
26-Jul-16
363.9
370.5
354.1
0
363.05
103,59,00
355.05
359.7
375
363.0
367.8
0
77,98,700
363.65
56,76,400
355.64
25-Jul-16
365
367.8
5
362.1
22-Jul-16
362.3
368.9
5
356.4
365.45
73,72,900
357.4
21-Jul-16
370
370
5
361.1
362.3
53,43,300
354.32
29-Jul-15
28-Jul-15
27-Jul-15
251
251
263
254.65
252.45
263.2
249.4
246.4
250.0
250.55
249.25
250.75
40,03,400
55,38,500
76,48,400
245.03
243.76
245.22
265.05
269.9
38,10,200
69,61,200
259.21
263.95
24-Jul-15
23-Jul-15
23-Jul-15
269.7
274
8.00 Dividend
271.65
274.45
5
264.2
269.3
22-Jul-15
21-Jul-15
271.25
284.1
281
284.1
268.7
273.8
280.4
274.7
59,10,800
50,95,100
266.4
260.98
20-Jul-15
17-Jul-15
16-Jul-15
285
282
285.1
287.7
286.35
286.5
5
283
280
280.1
283.55
284.05
280.8
37,33,700
64,49,900
63,13,300
269.39
269.87
266.78
18-Jul-14
17-Jul-14
556
543
568.5
560
549.2
540.2
563
558.8
72,95,300
70,26,500
534.89
530.89
546
5
525.5
542.7
44,08,600
515.6
16-Jul-14
531.5
15-Jul-14
14-Jul-14
518.8
496.8
14-Jul-14
10.00 Dividend
11-Jul-14
520
530
517.4
514.4
492.2
527.15
513.4
44,48,800
76,59,500
500.83
487.76
10-Jul-14
520
524.25
499.2
501.9
60,94,400
467.34
537.85
5
510.0
521.4
68,31,300
485.49
51,87,700
36,22,100
25,44,100
482.65
478.18
499.13
09-Jul-14
08-Jul-14
07-Jul-14
516
538
537.1
526.75
539.7
542.9
5
511.15 518.35
510
513.55
533.6 536.05
19-Jul-13
18-Jul-13
244.55
243.35
248.2
245.6
240
239.6
241
244.7
44,84,000
37,54,100
224.4
227.85
243.2
251.6
257.45
44,26,600
31,91,100
50,57,100
226.45
234.27
239.72
17-Jul-13
16-Jul-13
15-Jul-13
15-Jul-13
251.6
253.4
254.5
8.00 Dividend
253.45
256.1
259.5
5
242.2
250.7
251.9
12-Jul-13
11-Jul-13
10-Jul-13
261.5
262
263
264
265.35
263.05
258.5
259.1
255.2
262.65
261.05
256.2
37,13,200
54,20,100
49,15,300
237.11
235.67
231.29
09-Jul-13
262.6
264.1
5
260.1
261.65
33,90,500
236.21
259.9
39,04,600
234.63
08-Jul-13
262.9
262.9
5
258
20-Jul-12
19-Jul-12
411.5
416
417.9
416.9
411.5
412.7
415.95
414.45
23,38,100
26,92,600
375.51
374.15
413.75
413.65
5
404.3
404.8
411.65
405.8
33,57,600
33,94,300
371.63
366.34
5
406.2
407.95
40,11,700
368.29
424.1
427.0
425
428.5
33,17,100
35,17,000
372.84
375.92
5
435.1
432.5
436
438.8
30,46,500
37,75,900
382.49
384.95
18-Jul-12
17-Jul-12
405
411
16-Jul-12
16-Jul-12
13-Jul-12
12-Jul-12
417.5
418.7
12.00 Dividend
430
433
434.8
436.5
11-Jul-12
10-Jul-12
437.05
437
443.35
441.8
09-Jul-12
445
445
5
435.2
437.6
20,83,600
383.9
The companys market price has every time decreased after the dividend payment .
The share value has decreased in all the 5 years except in July 2014, otherwise the
share price has shown a negative movement in the price after every dividend
payment.
So we can say that the dividend policy of the company does effect the share price in a
negative way.
The Gordon growth model is used to determine the intrinsic value of a stock based on a
future series of dividends that grow at a constant rate. Given a dividend per share that is
payable in one year, and the assumption the dividend grows at a constant rate in perpetuity
Assumptions:
Gordons model is based on the following assumptions.
1. The firm is an all Equity firm
2. No external financing is available
3. The internal rate of return (r) of the firm is constant.
4. The appropriate discount rate (K) of the firm remains constant.
5. The firm and its stream of earnings are perpetual
6. The corporate taxes do not exist.
7. The retention ratio (b), once decided upon, is constant. Thus, the growth rate (g) = br is
constant forever.
8. K > br = g if this condition is not fulfilled, we cannot get a meaningful value for the share.
Above assumptions makes it difficult to formulate the model with respect to Tata Steel.
Modigliani and millers hypothesis:
Assumptions:
Modigliani and Millers hypothesis:
According to Modigliani and Miller (M-M), dividend policy of a firm is irrelevant as it does
not affect the wealth of the shareholders. They argue that the value of the firm depends on the
firms earnings which result from its investment policy.
1. The firm operates in perfect capital market
2. Taxes do not exist
3. The firm has a fixed investment policy
7
Again, because of flexible dividend policy system the model cannot be used as well.
CONCLUSION