Dividend Announcement

TABLE OF CONTENTS
CHAPTER 1: INYRODUCTION AND RESEARCH METHODOLOGY…………..3
1.1 INTRODUCTION ………………………………...............................4
1.2 OBJECTIVE OF THE STUDY……………………………………….6
1.3 LITERATURE REVIEW……………………………………………..7
1.4 RESEARCH METHODOLOGY………………….............................11
CHPATER 2: DATA ANALYSIS AND INTERPRETATION………………………13
2.1 SECONDARY ANALYSIS…………………………….....................14
2.2 PRIMARY ANALYSIS………………………………………….......34
CHAPTER 3: FINDINGS AND CONCLUSION ……………………………………62
CHAPTER4: LIMITATION…………………………………………………………..66
CHAPTER5: BIBLOGRAPHY………………………………….................................67
CHAPTER5: ANNEXURE………………………………………………………........68
1
LIST OF TABLES AND FIGURES
TABLES PAGE NO.
TABLE1…………………………………………………………………………….............................34
TABLE2……………………………………………………………………………………………...36
TABLE3……………………………………………………………………………………………...37
TABLE4……………………………………………………………………………………………...39
TABLE5…………………………………………………….. ………………………..........................41
TABLE6…………………………………………………….. ………………………………………43
TABLE7……………………………………………………..................................................................45
TABLE8………………………………………………………………………………………………47
TABLE9………………………………………………………………………………………………50
TABLE10……………………………………………………………………………………………..53
TABLE11……………………………………………………………………………………………..56
TABLE12……………………………………………………………………………………………..58
TABLE13……………………………………………………………………………………………..60
FIGURES
FIGURE1……………………………………………………………………………………………..34
FIGURE2……………………………………………………………………………………………..36
FIGURE3……………………………………………………………………………………………..37
FIGURE4……………………………………………………………………………………………..39
FIGURE5……………………………………………………………………………………………..41
FIGURE6……………………………………………………………………………………………..43
FIGURE7……………………………………………………………………………………………..45
FIGURE8.1, 8.2……………………………………………………………………………………….48
FIGURE8.3, 8.4……………………………………………………………………………………….49
FIGURE9.1, 9.2……………………………………………………………………………………….51
FIGURE9.3, 9.4……………………………………………………………………………………….52
FIGURE10.1, 10.2…………………………………………………………………………………….54
FIGURE10.3, 10.4…………………………………………………………………………………….55
FIGURE11…………………………………………………………………………………………….56
FIGURE12…………………………………………………………………………………………….58
FIGURE13…………………………………………………………………………………………….60
2
CHAPTER – 1
INTRODUCTION AND RESEAECH

METODOLOGY
3
ITRODUCTION
Investment means commitment of funds or money to gain a return. However, this commitment
of capital also has a price in terms of blocking of money and that too with a risk of losing it.
The concept is applied while investing in common stock in a more precise manner. Stock means
purchasing a share in the company’s business which entitles the investors to share profits
generated by the company. Stocks are more volatile and risky than debt securities. Before
investing into common stock, an investor should keep three factors in mind i.e., nature of
business, quality of management and price to be paid. These three factors will help together to
decide the proportion and time of investment. In addition to these factors there are so many
points to be considered before an investor finally takes a decision to invest in a particular
security. These factors can be knowledge of share market, trading at stock exchanges, risk and
return analysis, dividend expectations, news announcements especially dividend
announcements etc.
The most awaited type of regular return for an investor who invests into equity stocks are
dividends. Dividends are payments made by a corporation to its shareholders. It is the portion of
corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that
money can be put to two uses: it can either be re-invested in the business (called retained
earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion
of their earnings and pay the remainder as a dividend. The variation in the stock prices would be
more if dividend policy is frequently changed. It happens due to the frequent reactions of
investors in lieu of announcements at stock exchanges by the companies. Corporate
announcements refer to information provided by company officials time to time in the stock
markets. These announcements are generally communicated through annual financial reports of
the companies and the same are floated in stock exchanges for the information of investors.
However, before formal release of annual report if need be companies might provide relevant
and material information through a press release. In addition to information floated by
companies there can be various other general information and news in the market due to which
stock prices may change. The impact of various announcements in addition to dividend
declaration like mergers and acquisitions, management change over, new product launch,
4
starting of a new project or shutting down an existing one, political changes, central government
policy changes etc. is directly observed on stock returns of the company. They tend to fluctuate
as soon as the news is floated on the trading floor in stock exchanges.
OBJECTIVES OF THE STUDY
5
 To study the effect of Dividend Announcement on stock prices.
 To study the trend of prices at Pre-announcement and Post-announcement period.
 To study the awareness level of the investors regarding Dividend Announcements.
 To study the effect of Dividend Announcement on investing decision of Individual investor.
REVIEW OF LITERATURE
6
The researchers and academicians in India as well as abroad have made contribution in their
researches on dividend policies and announcement effect of dividends on stock prices. Bae Gil
S. (2008) examined negative tunneling within a chaebol and used a large sample of earnings
announcements made by firms belonging to Korean chaebols. The study found out that the
announcement increased (decreased) earnings over the previous year by a chaebol-affiliated
firm had a positive (negative) effect on the abnormal return for the value -weighted portfolio of
other non-announcing affiliates in the same group. Dasilas Apostolos (2008) investigated the
stock market reaction of the Athens Stock Exchange to cash dividend announcements for the
period 2000-2004. In particular, the study examined both the stock price and trading volume
response to company announcements about dividend distributions. The dividend distribution in
Greece featured remarkable differences from those of US, UK and other developed markets.
Eriotis Nikolaos (2007) discovered that existence of a long term dividend policy stood partly
unaffected by the level of current period earnings. Hazak Aaro (2007) presented a theoretical
model on dividend policy for distributed profit taxation which is the corporate taxation regime
of Estonia. Henry Elaine (2006) examined market reactions to firm’s earnings announcements.
The study extended the examination to include a broad range of concurrent disclosure contained
in earnings press releases, the financial disclosures captured as accounting ratios and verbal
components of disclosure which were captured using elementary computer based content
analysis. Hochberg Yael V. (2003) examined the effects of venture capital backing on the
corporate governance of the firm following the IPO. The study conducted three independent
sets of tests which examined effectively how governance and monitoring differed for venture
and non-venture backed firms. How Janice C. Y. (2007) observed that in a relatively less
litigious environment like Australia it was common to find IPO firms that voluntarily provided
forecasts in their prospectus. 158 Australian industrial IPOs listed from 1991 to 1997 were used
in the study to examine the impact of the disclosure and accuracy of earnings and dividend
forecasts on equity pricing. Hribar Paul (2004) examined how institutional investors respond to
accounting restatements. The study showed that transient institutional investors defined as
institutions with shorter investment horizons and higher portfolio turnover significantly reduced
their holding in a restating firm at least one quarter prior to the quarter of the restatement.
Jegadeesh Narasimhan (2002) examined the relation between revenue surprises and future stock
7
returns. The study investigated how analysts updated their earnings forecasts followed by
announcements of revenue and earnings surprises. The results indicated that the stock price
reaction on the earnings announcement date was significantly related to both revenue surprises
and earnings surprises. Kanniainen Juho (2007) examined stochasticity of stock return volatility
by questioning the assumption that the conditional expectations of future dividends react to the
same new information. The stochastic evolutions of conditional dividend expectations were
characterized by extending the information process to dividend paying stocks. Kanwal Anil
(2008) observed profitability as always been considered as a primary indicator of dividend
payout ratio. Apart from profitability, numerous other factors like cash flows, corporate tax,
sales growth and market to book value ratio were also considered rampant. Koerniadi Hardjo
(2008) examined in their study whether managers deliberately used accruals to convey
information regarding firm future profitability. The contemporaneous earnings and dividend
announcement data was used as research setting as it reduced the possibility of opportunistic
income smoothing by managers and hence increased the validity of the inference on the accrual
signaling hypothesis. Kumar Praveen (2006) derived a conditional CAPM in a general
equilibrium model where investors faced estimation risk on mean returns and learnt from
information of uncertain quality or precision. In equilibrium, the loading on market risk
augmented the standard beta with the random or information dependent conditional covariance
matrix of the unknown mean returns. Minnick Kristina L. (2004) examined the cross sectional
determinants of the decision to take write offs. A hand collected dataset on write-offs was used
that was much more comprehensive than existing write-off datasets. It was found that quality of
governance was positively related to write-off decisions in the cross section. The results also
suggested that poor governance companies waited to take write-offs until it became inevitable
while well-monitored companies took write-offs sooner. Narayanamoorthy Ganapathi (2003)
identified previously undocumented source of predictable cross-sectional variation in
Standardized Unexpected Earnings’ autocorrelations viz. the sign of the most recent earnings
realization and presented evidence that the market ignored this variation (loss effect). It was
possible to earn returns higher than from the Bernard and Thomas strategy by incorporating this
feature. Padgett Carol (2007) tested the signaling and free cash flow hypotheses of the
information content of share repurchases using UK open market share repurchases between
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January 1999 and December 2004. The five day mean announcement abnormal return of the
sample was low at 1.28% but it was statistically significant at the 5% level. Rees Lynn (2001)
examined the importance attached to revenue forecasts by firms and the market and whether
these forecasts were value-relevant conditional on earnings forecasts. The study was divided
into parts. First, it examined whether the capital market reaction to earnings and revenue
announcements had an association with revenue forecast errors conditional on earnings forecast
errors. Second, it investigated existence of differential valuation effects associated with meeting
or exceeding analysts’ revenue expectations over and above meeting/exceeding analysts’
earnings expectations. Sadka Ronnie (2005) investigated the components of liquidity risk that
were important for asset pricing anomalies. Firm-level liquidity was decomposed into variable
and fixed price effects and was estimated using intraday data for the period 1983-2001. The
unexpected systematic variations of the variable component rather than the fixed component of
liquidity were shown to be priced within the context of momentum and post earnings
announcement drift portfolio returns. Servaes Henri (2008) studied responses of industry when
another firm in the same industry was put to a hostile takeover attempt. The study documented
two major responses: first the industry peers cut their capital expenses, free cash flows, cash
holdings, increased their leverage and payouts to shareholders. Second, they increased the
quality of financial reporting. After the control threat, there was an evidence of less earnings
management, more timely loss recognition and more value relevance of accounting earnings.
Shu Tao (2008) analyzed the impact of trader composition i.e., the fraction of total trading
volume of a stock accounted for by institutional trading on the cross section of stock returns.
The study found that trader composition had significant effects on stock returns beyond
institutional ownership. Specifically, major stock market anomalies such as return momentum,
post earnings-announcement drift, value premium and investment effect were much stronger in
stocks with lower fraction of institutional trading volume. Subramani Mani R. (2002) examined
the returns to e-commerce events in the period from 1999 to 2000 which employed a set of
short time windows (1 day, 5 days, 10 days bracketing the event) as well as a set of long event
windows (6 months, 9 months and 1 year from the event). The results reflected little
consistency between abnormal returns in short 1 day, 5 days and 10 days event windows. In
contrast, the abnormal returns observed in 6, 9 and 12 months windows were reasonably
9
consistent. Zhu PengCheng (2008) examined the short term stock performance of a sample of
Indian firms who acquired U.S. firms in the period 1999-2005. The event study showed that
Indian stock market reacted positively to the acquisition announcement. Authors found out that
the positive abnormal return lasted for only three days after which the returns became negative.
The research work carried so far related to announcement effects has not stressed upon any key
sector of the economy. Moreover, significant results as to the relationship between
announcements and their impact on stock returns have not been discovered. Dividend
announcements in particular have been studied by various eminent scholars yet they have not
brought in a common conclusion in relation to the impact of dividend announcements on stock
returns or stock volatility before and after declaration of dividends. Thus, the present study
contributes towards the impact of dividend announcements on stock returns vis a vis analysis of
stock price variations before and after dividend declaration.
RESEARCH METHODOLOGY
RESEARCH TYPE
We use descriptive research and exploratory research design in our studies. Descriptive
research is also called Statistical Research. The main goal of this type of research is to describe
the data and characteristics about what is being studied. The idea behind this type of research is
10
to study frequencies, averages, and other statistical calculations. Although this research is
highly accurate, it does not gather the causes behind a situation. Descriptive research is used to
obtain information concerning the current status of the phenomena to describe "what exists"
with respect to variables or conditions in a situation.
The study has focused on 12 companies randomly selected for analyzing dividend
announcement effects. The companies selected are on the basis of Manufacturing companies, IT
companies, Telecom companies, Infrastructure companies and Banking and Finance
companies .These companies are the most popularly traded at NSE India on the basis of their
order of trading volumes. The information about the dividend announcement reaches the
common investors publically
The methods involved range from the survey which describes the status quo, the correlation
study which investigates the relationship between variables, to developmental studies which
seek to determine changes over time.
• Statement of the problem

• Identification of information needed to solve the problem
• Selection or development of instruments for gathering the information
• Identification of target population and determination of sampling procedure
• Design of procedure for information collection
• Collection of information
• Analysis of information
• Generalizations and/or predictions
DATA COLLECTION
Primary Data: Structured Questionnaire
Secondary Data: Online Database, Journals, Surveys
11
SAMPLING
We have used convenience sampling technique. It is also called haphazard or accidental
sampling. Members of the population are chosen based on their relative ease of access. To
sample friends, co-workers, or shoppers at a single mall, are all examples of convenience
sampling. Sometimes called grab or opportunity sampling, this is the method of choosing items
arbitrarily and in an unstructured manner from the frame. Though almost impossible to treat
rigorously, it is the method most commonly employed in many practical situations.
Sample Unit: INVESTORS FROM CHANDIGARH, MOHALI AND PATIALA

Sample Technique: Convenient sampling
Sample Area: CHANDIGARH, MOHALI AND PATIALA
Sample Size: 100
TOOLS
Statistical : Tables, Bar Charts and Pie Charts
Techniques : Simple Percentage and ratio
12
CHAPTER – 2
DATA INTERPRETATION AND ANALYSIS
SECONDARY DATA ANALYSIS
INFOSYS TECHNOLOGY LTD.
13
Dividend: Final Dividend of 770%
Thursday, May 25, 2006
Closing Price of the share before announcement and after dividend announcement of final
dividend was
May 24, 2006 – Rs.2860
May 25, 2006 – Rs.2828
May 26, 2006 – Rs.2934
May 27, 2006 – Rs.2967
Dividend: Interim Dividend of 100%
Thursday, October 19, 2006
Closing price of the share before and after interim dividend announcement was
October 18, 2006 – Rs.2073
October 19, 2006 – Rs.2068
October 20, 2006 – Rs.2076
October 21, 2006 – Rs.2083
Wednesday, June 06, 2007
Closing price of the share before and after final dividend announcement was
June 5, 2007 – Rs.1943
June 6, 2007 – Rs.1938
June 7, 2007 – Rs.1957
June 8, 2007 – Rs.1958

October 17, 2007 – Rs.1890
October 18, 2007 – Rs.1890
October 19, 2007 – Rs.1909
October 22, 2007 – Rs.1956
14
May 28, 2008 – Rs.1911
May 29, 2008 – Rs.1885
May 30, 2008 – Rs.1962
June 2, 2008 – Rs.1964
October 15, 2008 – Rs.1335
October 16, 2008 – Rs.1263
October 17, 2008 – Rs.1284
October 20, 2008 – Rs.1294
Thursday, June 04, 2009
June 3, 2009 – Rs.1641
June 4, 2009 – Rs.1629
June 5, 2009 – Rs.1698
June 6, 2009 – Rs.1742
October 14, 2009 – Rs.2243
October 15, 2009 – Rs.2217
October 16, 2009 – Rs.2289
October 17, 2009 – Rs.2293
Wednesday, May 26, 2010
May 25, 2010 – Rs.2533
May 26, 2010 – Rs.2621
May 27, 2010 – Rs.2643
May 28, 2010 – Rs.2677
October 20, 2010 – Rs.3018
October 21, 2010 – Rs.3034
October 22, 2010 – Rs.3053
October 25, 2010 – Rs.3089
15
It is Proposed Dividend not yet paid
 Infosys practice frequent Dividend announcement which is why there stock prices have
higher value.
 From the above data it is clearly specified that Post-announcement effect is more than the
Pre-announcement effect as the socks are rising after the dividend is paid and not before
it.
 The stock prices are showing same trend whether it is interim Dividend announcement or
Final Dividend announcement.
WIPRO LTD.
16
June 28, 2006 – Rs.484
June 29, 2006 – Rs.496
June 30, 2006 – Rs.513
July 3, 2006 – Rs.530
Monday, March 26, 2007
March 26, 2007 – Rs.581
March 28, 2007 – Rs.594
March 29, 2007 – Rs.592
March 30, 2007 – Rs.595
June 27, 2007 – Rs.509
June 28, 2007 – Rs.514
June 29, 2007 – Rs.518
July 2, 2007 – Rs.523
October 24, 2007 – Rs.486
October 25, 2007 – Rs.496
October 26, 2007 – Rs.499
October 29, 2007 – Rs.509
Friday, June 27, 2008
17
June 26, 2008 – Rs.440
June 27, 2008 – Rs.439
June 30, 2008 – Rs.450
June 1, 2008 – Rs.482
Monday, June 29, 2009
June 29, 2009 – Rs.377
June 30, 2009 – Rs.379
July 1, 2009 – Rs.379
July 2, 2009 – Rs.381
Tuesday, June 15, 2010
June 14, 2010 – Rs.404
June 15, 2010 – Rs.647
June 16, 2010 – Rs.408
June 17, 2010 – Rs.413
Thursday, January 27, 2011
January 25, 2011 –Rs.438
January 27, 2011 – Rs.446
January 28, 2011 – Rs.447
January 31, 2011 – Rs.456
 Wipro practice same frequent dividend announcement like Infosys and both are IT
companies.
it.
 The stock prices are showing same trend whether it is interim Dividend announcement or
Final Dividend announcement.
TATA MOTORS
18
June 22, 2006 – Rs.758
June 23, 2006 – Rs.775
June 25, 2006 – Rs.777
June 26, 2006 – Rs.780
May 31, 2007 – Rs.710
June 1, 2007 – Rs.710
June 4, 2007 – Rs.747
June 5, 2007 – Rs.755
June 16, 2008 – Rs.516
June 17, 2008 – Rs.519
June 18, 2008 – Rs.521
June 19, 2008 – Rs.534

Monday, August 03, 2009
August 3, 2009 – Rs.431
19
August 4, 2009 – Rs.443
August 5, 2009 – Rs.449
August 6, 2009 – Rs.456
Tuesday, August 10, 2010
August 9, 2010 – Rs.919
August 10, 2010 – Rs.957
August 11, 2010 – Rs.1006
August 12, 2010 – Rs.1024
 Tata Motors comes under manufacturing companies’ category and this company has a
policy of announcement of dividend on yearly basis i.e. only final dividend is announced.
it.
 As the company only announces final dividend the effect of Dividend announcement
reflect to only that particular period which is mostly June and August.
MARUTI SUZUKI INDIA LTD.
20
Wednesday, August 23, 2006
August 22, 2006 – Rs.836
August 23, 2006 – Rs.826
August 24, 2006 – Rs.830
August 25, 2006 – Rs.833
August 21, 2007 – Rs.767
August 22, 2007 – Rs.765
August 23, 2007 – Rs.775
August 24, 2007 – Rs.890
Thursday, August 14, 2008
August 13, 2008 – Rs.669
August 14, 2008 – Rs.650
August 18, 2008 – Rs.670
August 19, 2008 – Rs.675
August 17, 2009 – Rs.1275
August 18, 2009 – Rs.1300
August 19, 2009 – Rs.1301
August 20, 2009 – Rs.1370
21
August 23, 2010 – Rs.1220
August 24, 2010 – Rs.1227
August 25, 2010 – Rs.1233
August 26, 2010 – Rs.1245
 Maruti Suzuki comes under manufacturing companies’ category and this company has a
policy of announcement of dividend on yearly basis i.e. only final dividend is announced.
it.
reflect to only that particular period which is mostly August and the share prices of the
company has shown tremendous growth in past 5 years.
BHARTI AIRTEL LTD.
22
Friday, July 24, 2009
July 23, 2009 – Rs.361
July 24, 2009 – Rs.364
July 25, 2009 – Rs.372
July 26, 2009 – Rs.390
Split: Stock Split to reduce face value from Rs 10 /share to Rs 5/share
August 17, 2010 – Rs.310
August 18, 2010 – Rs.314
August 19, 2010 – Rs.315
August 20, 2100 – Rs.316
 Bharti Airtel is a telecom company which rarely announces Dividends as the company in
past 5 years announces only 2 Final Dividend.
 On July 2009 Company had split their share which results in drastic fall in prices of
shares, to counter this company made dividend announcement and the stock prices gain
some momentum. Same in the case of 2 announcements.
 So, it is clearly specified that Post-announcement effect is more than the Pre-
announcement effect as the socks are rising after the dividend is paid and not before it.
RELIANCE COMMUNICATIONS Ltd.
23
Thursday, July 05, 2007
July 4, 2007 – Rs.542
July 5, 2007 – Rs.543
July 6. 2007 – Rs.550
July 7, 2007 – Rs.552
Friday, September 19, 2008
September 18, 2008 – Rs.356
August 3, 2009 – Rs.270
August 4, 2009 – Rs.279
August 5, 2009 – Rs.283
August 6, 2009 – Rs.290
Monday, September 13, 2010
 Reliance Communication comes under Telecom companies’ category and this company
has a policy of announcement of dividend on yearly basis i.e. only final dividend is
announced.
24
it.
reflect to only that particular period.
RELIANCE INFRASTRUCTURE LTD.
25
May 23, 2009 – Rs.786
May 24, 2009 – Rs.798
May 25, 2009 – Rs.793
May 26, 2009 – Rs.810
June 27, 2008 – Rs.669
June 28, 2008 – Rs.650
June 29, 2008 – Rs.670
June 30, 2008 – Rs.675

July 4, 2007 – Rs.542
July 5, 2007 – Rs.543
July 6. 2007 – Rs.550
July 7, 2007 – Rs.552

July 1, 2009 – Rs.787
July 2, 2009 – Rs.799
July 3, 2009 – Rs.795
26
July 4, 2009 – Rs.823
 Reliance Infrastructure comes under Infrastructure companies’ category and this

company has a policy of announcement of dividend on yearly basis i.e. only final
dividend is announced.
it.
reflect to only that particular period that is in the mid of the calendar year.
INFRASTRUCTURE DEVELOPMENT FINANCE COMPANY LTD.
27
July 9, 2010 – Rs.134
July 10, 2010 – Rs.136
July 11, 2010 – Rs.139
July 12, 2010 – Rs.147
Tuesday, July 07, 2009
July 16, 2010 – Rs.162
July 17, 2010 – Rs.163
July 18, 2010 – Rs.165
July 19, 2010 – Rs.170
June 6, 2009 – Rs.270
June 7, 2009 – Rs.279
June 8, 2009 – Rs.283
June 9, 2009 – Rs.290
 IDFC comes under Infrastructure companies’ category and this company has a policy of
announcement of dividend on yearly basis i.e. only final dividend is announced.
28
it.
reflect to only that particular period that is June or July.
ICICI BANK LTD.
29
July 5, 2009 – Rs.786
July 6, 2009 – Rs.798
July 7, 2009 – Rs.793
July 8, 2009 – Rs.810
June 13, 2009 – Rs.787
June 14, 2009 – Rs.799
June 15, 2009 – Rs.795
June 16, 2009 – Rs.823
July 9, 2008 – Rs.356
July 10, 2008 – Rs.369
July 11, 2008 – Rs.374
July 12, 2008 – Rs.379

June 10, 2006 – Rs.836
June 11, 2006 – Rs.826
June 12, 2006 – Rs.830
June 15, 2006 – Rs.833
30
June 9, 2010 – Rs.919
June 10, 2010 – Rs.957
June 11, 2010 – Rs.1011
June 12, 2010 – Rs.1035
 ICICI Bank comes under Banking and Finance companies’ category and this company
announced.
it.
reflect to only that particular period that is in the starting of June or July.
HDFC BANK LTD.
31
May 10, 2006 – Rs.836
May 11, 2006 – Rs.854
May 12, 2006 – Rs.886
May 13, 2006 – Rs.898
May 16, 2010 – Rs.1220
May 17, 2010 – Rs.1227
May 18, 2010 – Rs.1233
May 19, 2010 – Rs.1245
Tuesday, April 29, 2008
April 10, 2006 – Rs.898
April 11, 2006 – Rs.904
April 12, 2006 – Rs.926
April 13, 2006 – Rs.947
June 15, 2008 – Rs.1335
June 16, 2008 – Rs.1345
June 17, 2008 – Rs.1489
June 20, 2008 – Rs.1442

32
June 9, 2008 – Rs.1921
June 10, 2008 – Rs.1884
June 11, 2008 – Rs.1959
June 12, 2008 – Rs.1987
 HDFC Bank comes under Banking and Finance companies’ category and this company
announced.
it.
reflect to only that particular period.
PRIMARY DATA INTERPRETATION AND ANALYSIS
33
Q1: Are you aware about the dividend announcements made by the companies?
 YES (100) NO (0)
Table-1
40
20
Business
Service
0 Proffesional
YES NO
Students
Business 30 0
Service 40 0
Proffesional 20 0
Students 10 0
Figure-1
The awareness level among the respondents is 100% as all of the investors say ‘yes’ in which
 30% are the Business man
 40% are the Service man
 20% are the Professionals
 10% are the students who invest in stocks
Total numbers of investors are 100 and out of which 30 are Business men, 40 are Service
men, 20 are Professionals, 10 are students who invest in stocks.
Analysis of the coming questions will be done according to this proportion of investors.
Q: 2 Which type of companies you most prefer for investing?

 Large companies
34
 Medium companies
 Small companies
Table -2
Investors Large Companies Medium companies Small companies
Business man(30) 16(53.33%) 11(36.67%) 3(10%)
Service man(40) 24(60%) 11(27.5%) 5(12.5%)

Professionals(20) 17(85%) 3(15%) 0(0%)
Student 2(20%) 2(20%) 6(60%)
investors(10)
Figure-2
25
20
15 Business man
Service man
10 Proffesionals
Student Investors
5
0
Large companies Medium companies Small companies
From Table-2 Figure-2 following interpretation has been done:
 Out of 30 Business men 53.33% prefer large companies, 36.67% prefer medium scale
companies and only 10% prefer small scale companies.
35
 Out of 40 service men 60% prefer large companies, 27.5% prefer medium companies and
12.5% prefer small companies.
 Out of 20 professionals 85% prefer large companies, 15% prefer medium companies and 0%
prefers small companies.
 Out of 10 Student investors 20% prefer large companies, 20% prefer medium companies and
60% prefer small companies.
 Consolidated interpretation of data:

1. 59 out of 100 investors like to invest in large companies.
2. 27 out of 100 investors like to invest in medium companies.
3. 14 out of 100 investors like to invest in small companies.
Q: 3 What are the most preferred sources from which you obtain information about dividend
announcement?
 Newspaper
36
 Television
 Internet
 All of these
Table-3
Investors Newspaper Television Internet All of these

Business 2(6.67%) 6(20%) 8(26.67%) 14(46.66%)
man(30)
Service man(40) 3(7.5%) 5(12.5%) 14(35%) 18(45%)
Professionals(20) 0 4(20%) 12(60%) 4(20%)
Student 0 2(20%) 8(80%) 0
investors(10)
Figure-3
18
16
14
12
Business man
10
Service man
8
Professionals
6
Student investors
4
2
0
Newspaper Television Internet All of these
From Table-3Figure-3 following interpretation has been done:
 Out of 30 Business man 6.67% prefer Newspaper, 20% prefer Television, 26.67% prefer
internet and 46.66% prefer all of these for obtaining information about Dividend
announcements.
37
 Out of 40 Service man only 7.5% prefer Newspaper, 12.5% prefer Television, 35% prefer
internet and 45% prefer All of these for obtaining information about Dividend
announcements.
 Out of 20 Professionals 0% prefer Newspaper, 20% prefer Television, 60% prefer Internet
and remaining 20% prefer All of these for obtaining information about Dividend
announcements.
 Out of 10 Student investors 0% prefers Newspaper, 20% prefer Television, 80% prefer
Internet and 0% for All of these for obtaining information about Dividend announcements.

1. 5 out of 100 prefer only Newspaper.
2. 17 out of 100 prefer only Television.
3. 42 out of 100 prefer only Internet.
4. 36 out of 100 prefer all of these.
Q:4 According to you which type of companies are most frequent in announcement of
dividend?
 Manufacturing Companies
 IT Companies
 Telecom Companies
38
 Trading Companies
 Infrastructure Companies
 Banking and Finance Companies
Table-4
Investors Manufacture IT Telecom Trading Infrastructure Banking

Companies Companie Companie Companie Companies And
s s s Finance
Business 2 22 0 0 0 6
man(30)
Service man(40) 1 35 0 0 0 4
Professionals(20) 0 19 0 0 0 1
Student 1 7 0 0 0 2
investors(10)
Figure- 4
35
30
25
20 Business man
15 Service man
10 Professionals
5 Student investors
0
Manufcture IT Telecom Trading Infrastructure Banking and
Finance

 According to Business man 6.67% selected manufacturing companies, 73.33% selected IT
companies, 0% selected Telecom companies, 0% selected Trading companies, 0% selected
Infrastructure companies and 20% selected Banking and Finance companies for frequent
announcement of dividends.
39
 According to Service man 2.5% selected manufacturing companies, 87.5% selected IT
 According to Professionals 0% selected manufacturing companies, 95% selected IT
 According to Student investors 10% selected manufacturing companies, 70% selected IT

1. 4 out of 100 think manufacturing companies are most frequent in announcing of
dividends.
2. 83 out of 100 think IT companies are most frequent in announcing of dividends.
3. 13 out of 100 think Banking and Finance companies are most frequent in announcing
of dividends.
Q: 5 Which type of announcement you think is most effective in pushing the prices of shares?
 Dividend announcement
 Buyback
 Joint venture
 Change in capital structure
 Government acquisition
40
 Change in management
 All of these
Table-5
Investors Dividend Buyback JointVenture Change in Govt. Change in All of

Announcement capital acquisition management these
Business man 26 3 1 0 0 0 0
(30)
Service man(40) 32 4 3 0 1 0 0
Professionals(20 18 2 0 0 0 0 0
)
Student 8 1 1 0 0 0 0
investors(10)
Figure-5
35
30
25
20 Business man
15 Service man
10 Professionals
5 Student Investors
0
Dividend Joint venture Govt. All
Acquition
 86.67% of Business men think Dividend announcement, 10% think Buy Back and 3.33%
think Joint Venture is most effective in pushing the prices of shares.
 80% of Service man think Dividend announcement, 10% think Buy Back,7.5% think Joint
Venture and 2.5% think Govt. acquisition is most effective in pushing the prices of shares.
41
 90% of Professionals think Dividend announcement and10% thinks Buy Back is most
effective in pushing the prices of shares.
 80% of Student investors think Dividend announcement, 10% think Buy Back and 10%
think Joint Venture is most effective in pushing the prices of shares.
1. 84 out of 100 think dividend announcement is most effective in pushing the prices of
shares.
2. 10 out of 100 think Buy back announcement is most effective in pushing the prices of
shares.
3. 5 out of 100 think Joint Venture announcement is most effective in pushing the prices
of shares.
4. 1 out of 100 think Govt. acquisitions is most effective in pushing the prices of shares.
Q:6 Which type of announcement you think is most effective in falling the prices of shares?
 Buyback
 Joint venture
42
 All of these
Table-6
Investors Dividend Buyback JointVenture Change in Govt. Change in All of

Announcement capital acquisition management these
Business man 0 0 0 23 1 6 0
(30)
Service man(40) 0 0 0 24 5 11 0
Professionals(20 0 0 0 17 0 3 0
)
Student 0 0 0 6 0 4 0
investors(10)
Figure-6
25
20
15 Business man
10 Service man
Professionals
5 Student investors
0
Dividend Joint venture Govt. All
acquisition
 76.67% of Business men think Change in capital structure, 3.33% think Govt. acquisition
and 20% think Change in management results in falling of the prices of shares.
 60% of Service men think Change in capital structure, 12.5% think Govt. acquisition and
27.5% think Change in management results in falling of the prices of shares.
43
 85% of Professionals think Change in capital structure and 15% think Change in
management results in falling of the prices of shares.
 60% of Student investors think Change in capital structure and 40% think Change in
management results in falling of the prices of shares.

1. 70 out of 100 think change in capital structure is most effective in falling of stock
prices.
2. 6 out of 100 think Govt. acquisition is most effective in falling of stock prices.
3. 24 out of 100 think change in management is most effective in falling of stock
prices.
Q: 7 Which of the following influence the stock prices more?

 Pre-announcement
 Post-announcement
Table-7
44
Investors Pre-announcement Post-announcement
Business man (30) 7 23
Service man(40) 4 36
Professionals(20) 1 19
Student investors(10) 3 7
Figure- 7
40
35
30
25 Business man
20 Service man
15 Professionals
10 Student Investors
5
0
Pre-announcement Post-announcement
 Out of 30 Business men 7 said pre-announcement and 23 said post-announcement and in

terms of percentage 23.33% goes for pre-announcement and 76.67% goes for post-
announcement for influencing the stock prices more.
45
 Out of 40 Service men 4 said pre-announcement and 36 said post-announcement and in
terms of percentage 10% goes for pre-announcement and 90% goes for post-announcement
for influencing the stock prices more.
 Out of 20 Professionals 1 said pre-announcement and 19 said post-announcement and in
terms of percentage 5% goes for pre-announcement and 95 % goes for post-announcement
 Out of 10 Student investors 3 said pre-announcement and 7 said post-announcement and in
terms of percentage 30% goes for pre-announcement and 70% goes for post-announcement

1. 15 out of 100 think pre-announcement has more influence.
2. 85 out of 100 think post announcement has more influence.
Q: 8 Do you go by the announcements before investing in shares of any company?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly disagree
Table-8
46
Investors Strongly Agree Neutral Disagree Strongly
agree Disagree
Business man 21(70%) 7(23.33%) 2(6.67%) 0 0
(30) 100%
Service man 29(72.5%) 10(25%) 1(2.5%) 0 0
(40) 100%
Professionals 15(75%) 5(25%) 0 0 0
(20) 100%
Student 5(50%) 5(50%) 0 0 0
investors (10)
100%
Figure 8.1
47
7% 0%
23% Strongly agree

Agree
neutral
Disagree
Strongly Disagree
70%
 Figure 8.1 shows the result of Business man in which 70% of them are strongly agree,
23.33% of them are agree and 7.67% of them have neutral opinion regarding the question
Figure-8.2
3% 0%
25%
Strongly agree
Agree
Neutral
Disagree
Strongly Disagree
72%
 Figure 8.2 shows the result of Service man in which 72.5% of them are strongly agree, 25%
of them are agree and 2.5 % of them have neutral option regarding the question.
Figure-8.3
48
Strongly agree
Agree
Neutral
Disagree
Strongly diagree
 Figure 8.3 shows the result of Professionals in which 75% of them are strongly agree and
25% of them are agree regarding the question.
Figure-8.4
0%
Strongly agree
Agree
Neutral
50% 50% Disagree
Strongly disagree
 Figure 8.4 shows the result of Student investors in which 50% of them are strongly agree
and50% of them are regarding the question.
 Consolidated interpretation shows 70% are strongly agree, 27% are agree and 3% says
neutral in their opinion.
Q:9 Do the Stocks react to dividend announcements?

 Strongly Agree
49
 Agree
 Neutral
 Disagree
Table-9

agree Disagree
Business man 18(60%) 7(23%) 3(10%) 2(7%) 0
(30) 100%
Service man 22(54%) 13(33%) 4(10%) 1(3%) 0
(40) 100%
Professionals 12(60%) 5(25%) 0 3(15%) 0
(20) 100%
Student 4(40%) 3(30%) 2(20%) 1(10%) 0
investors (10)
100%
Figure-9.1
50
7% 0%
10%
Strongly agree
Agree
Neutral
23% Disagree
60% Strongly disagree
 Figure-9.1 shows the results of Business man in which 60% of them are strongly agree, 23%
are Agree, 10% of them have Neutral opinion and 7% of them are Disagree regarding the
Question.
Figure-9.2
10% 3%0%
Strongly agree
Agree
neutral
54% Disagree
33%
Strongly Disagree
 Figure-9.2 shows the results of Service man in which 54% of them are strongly agree, 33%
are Agree, 10% of them have Neutral opinion and 3% of them are Disagree regarding the
Question.
Figure-9.3
51
15% 0%
0%
Strongly Agree
Agree
Neutral
25% Disagree
60%
Strongly Disagree
 Figure 9.3 shows the results of Professionals in which 60% of them are strongly agree, 25%
are Agree and 15% of them are Disagree regarding the Question.
Figure-9.4
10% 0%
20% 40% Strongly agree

Agree
Neutral
Disagree
Strongly Disagree
30%
 Figure 9.4 shows the results of Student investors in which 40% of them are strongly agree,
30% are Agree, 20% have Neutral opinion and 10% of them are Disagree regarding the
Question.
Q: 10 Do You think that Dividend Announcements affect your investing decision?

 Strongly Agree
 Agree
 Neutral
 Disagree
52
Table-10

agree Disagree
Business man 16 (53%) 12(40%) 2(7%) 0 0
(30) 100%
Service man 32(79%) 7(18%) 1(3%) 0 0
(40) 100%
Professionals 17(85%) 2(10%) 0 1(5%) 0
(20) 100%
Student 7(70%) 1(10%) 2(20%) 0 0
investors (10)
100%
Figure-10.1
53
7% 0%
Strongly agree
Agree
Neutral
40% 53% Disagree
Strongly Disagree
 Figure-10.1shows the results of Business man in which 53% are strongly agree, 40% are
Agree, 7% of them have Neutral opinion regarding the question.
Figure-10.2
3% 0%
18%
Strongly agree
Agree
Neutral
Disagree
Strongly Disagree
79%
 Figure-10.2 shows the results of Service man in which 79% are strongly agree, 18% are
Agree and3% of them have Neutral opinion regarding the question.
Figure-10.3
54
0% 5% 0%
10%
Strongly agree
Agree
Neutral
Disagree
Strongly Disagree
85%
 Figure-10.3 shows the results of Professionals in which 85% are strongly agree, 10% are
Agree and3% of them are Disagree regarding the question.
Figure-10.4
0%
20%
Strongly agree
Agree
Neutral
10% Disagree
Strongly Disagree
70%
 Figure-10.4 shows the results of Student investor in which 70% are strongly agree, 10% are
Agree and 20% of them have Neutral opinion regarding the question.
 Consolidated interpretation: 72% are strongly agreed, 22% are agreed, 5% says Neutral and
1% are disagree.
Q: 11 What is your action after announcement is made?
 You Purchase more Shares of that company
 You sell the share
55
 Do nothing and wait
Table-11
Investors Purchase more shares You sell the shares Do nothing & wait
Business man(30) 26(87%) 0 4(13%)
Service man(40) 33(82.5%) 0 7(17.5%)
Professionals(20) 18(90%) 0 2(10%)
Student investors(10) 9(90%) 0 1(10%)
Figure-11
35
30
25
20 Business man
Service man
15
Professionals
10 Student investors
0
Purchase Sell Do nothing &wait
 Out of 30 Business man 87% purchase more shares and 13% do nothing and wait after the
dividend announcement is made.
56
 Out of 40 Service man 82.5% purchase more shares and 17.5% do nothing and wait after the
 Out of 20 Professionals 90% purchase more shares and 10% do nothing and wait after the
 Out of 10 Student investors 90% purchase more shares and 10% do nothing and wait after
the dividend announcement is made.
 Consolidated interpretation of Data:

1. 86 out of 100 purchases more shares after the announcement is made.
2. 14 out of 100 do nothing and wait after the announcement is made.
Q: 12 what do you do when you receive any information about future announcement?
 React immediately
 Wait for the conformation
 Do nothing
57
Table-12
Investors React immediately Wait for confirmation Do nothing
Business man(30) 18(60%) 10(33%) 2(7%)
Service man(40) 9(22.5%) 30(75%) 1(2.5%)
Professionals(20) 12(60%) 8(40%) 0()
Student investors(10) 1(10%) 8(80%) 1(10%)
Figure-12
30
25
20
Business man
15
Service man
10 Professionals
Student investors
5
0
React immediately Wait for Do nothing
confirmation
From figure-12 following is the analysis:

 Out of 30 Business man 18(60%) react immediately and 10(33%) wait for the
confirmation and 2(7%) do nothing regarding the question.
58
 Out of 40 Service man 9(22.5%) react immediately and 30(75%) wait for the
confirmation and 1(2.5%) do nothing regarding the question.
 Out of 20 Professionals 12(60%) react immediately and 8(40%) wait for the confirmation
regarding the question.
 Out of 10 Student investors 1(10%) react immediately and 8(80%) wait for the
confirmation and 1(10%) do nothing regarding the question.

1. 40 out of 100 react immediately.
2. 56 out of 100 wait for the conformation.
3. 4 out of 100 do nothing.
Q:13 For how much time do you think the effect of dividend announcement is on the stock
prices?
 Temporary
59
 Atleast few days
 Permanent
Table-13
Investors Temporary Atleast few days Permanent
Business man(30) 6(20%) 22(73%) 2(7%)
Service man(40) 5(12.5%) 34(85%) 1(2.5%)
Professionals(20) 4(20%) 16(80%) 0
Student Investors(10) 3(30%) 7(70%) 0
Figure-13
35
30
25
20 Business man
Service man
15
Professionals
10 Student Investors
0
Temporary Atleast Few Days Permanent
From figure-13 following is the analysis:

 20% of the Business men think its temporary, 73% think it remains for atleast few days
and 7 % thinks it is permanent.
60
 12.5% of the Service men think its temporary, 85% think it remains for atleast few days
and 2.5 % thinks it is permanent.
 20% of the Professionals think its temporary, 80% think it remains for atleast few days
 30% of the Student investors think temporary, 70% think it remains for atleast few days

1. 18 out of 100 say announcement effect is temporary.
2. 79 out of 100 say it remains for atleast few days.
3. 3 out of 100 say it remains permanent.
61
CHAPTER – 3
FINDINGS AND CONCLUSION
FINDINGS
62
 From the secondary data of different companies obtained from the Economic Times clarifies
that there is a positive effect of Dividend Announcement on share prices of that sample
companies. After announcing of dividend the stock prices tend to rise for few days
depending upon the type of company, so throw this the result comes out to be is that
Dividend announcement surely pushes the prices of the stock for certain period of time.
 There is 100% awareness level among the investors comprising of 100 investors in the
proportion of Business man 30, Service man 40, and Professionals 20 and Student investors
10 respectively. All of them are perfectly aware about the Dividend announcements.
 This survey also showed that most of the investors prefer large companies for investing i.e.
nearly 59% and 27% investors like medium companies for investing, the Business man ,
Service man and Professionals are the ones who most prefer Large companies for investing
and students like small companies for investing due to shortage of available funds,
 Internet is the most preferred source for obtaining information regarding dividend
announcement followed by Television and Newspaper but a fair amount of investors i.e.
36% uses all of these sources.
 According to the investors IT companies are more frequent in announcing their Dividends
followed by Banking and Finance companies and Manufacturing companies and it has also
been proven from the secondary data of Infosys and Wipro Ltd. That these companies are
more frequent in dividend announcement.
 This study reveals that most of the investors either they are Business man or Service man or
Professionals or Student investors thinks that Dividend Announcement is most effective in
pushing the prices of shares with 84% of investors checking this option.
 This study also reveals that Change in capital structure and Change in management results
into falling of the prices of shares with 70% of investors selecting Change in capital
structure and only 24% selecting change in management. Change in capital structure here
means splitting f the shares, further issue of new shares, change in proportion of capital
structure etc.
 According to the interpretation of data post announcement period of dividend
announcement results more in influencing the prices of the share and 85% of the investors
say so and also the secondary data of the movement of stock prices of companies showed
same result.
 70 % of the investors have strongly agreed and 27% are agreed with the statement that they
go by the announcement before investing in stock market.
 56% of the investors have strongly agreed and 28% are agreed with the statement that all the
stocks react to dividend announcement but there are 7% investors who don’t agree because
of some unforeseen risk in the share market.
63
 72% of investors have strongly agreed and 22 % are agreed with the statement that there
investing decision is strongly affected by the Dividend announcements which shows that the
investors go by the announcement frequency and timing of the companies before investing.
 More than 85% of the investors tend to purchase more share after the announcement is made
which surely results in the rise of share prices in the stock market.
 40 % of the investors tend to react immediately when they receive information about the
future dividend announcement in which most of them are Business man and Professionals
who have more funds at disposals and 56 % wait for the conformation, this ratio is high
because of more number of service man (40) in sample who have limited funds to invest, so
they wait for confirmation and also a major portion of students wait for the conformation.
 Around 79 % of the investors said that effect of dividend announcement last for atleast few
days and this statement is also supported by the secondary data of the sample companies
taken.
CONCLUSION
64
From this research report it is concluded that there is a significant impact of the Dividend
Announcement made by the corporate bodies and it is clear through the data of the sample
companies, however this may become insignificant to some companies as the sample
companies taken are well versed and competent companies, and the movement of graph and
before and after prices of the shares shows that there is positive significance of the Dividend
announcements in stock market.
Through the empirical research conducted from the real time investors proves that they are
strongly aware about the dividend announcement and goes by the announcement before
investing in the share market and also have the deep knowledge of the dividend announcement,
what is its effect, for how much time period a particular stock reflect positive movement after
Dividend announcement is made.
LIMITATIONS
1. Time Constraints.
2. Budgetary Constraints.
65
3. The participants comprised a small sample, which can be generalized across the sector.
BIBLIOGRAPHY
RESEARCH PAPER:
66
 Bhatia Parul, Lecturer, IILM B-School New Delhi. A STUDY OF DIVIDEND
ANNOUNCEMENTS ON STOCK RETURNS OF POPULARLY TRADED
COMPANIES IN INDIA, Volume 1, Issue 3 (December, 2010)
WEBSITE:
 The Economic Times.com
REFRENCE
 ALBOUY & DUMONTIER (1992), La politique de dividendes des entreprises, PUF

FINANCE.
 BAKER H., FARRELLY G. and EDELMAN R. (1985), A survey of management views
on dividend policy, Financial Management, vol 14 N°3.
 BEAVER W. (1968), The information content of annual earnings announcements,
Empirical
research in accounting.
 BLACK F. (1976), The dividend puzzle, Journal of Portfolio Management, Vol 2 N°4.
 BOOTH L. and JOHNSTON D. (1984), The ex-dividend day behavior of canadian stock
prices : tax changes and clienteles effects, Journal of Finance, VOL XXXIX N°2.
 CHRISTIE W. (1994), Are dividend omissions truly the cruelest cut of all ?, Journal of
Finance and Quantitative Analysis, Vol 29 N°3.
 DESBRIERES P. (1988), L'effet de clientèle des dividendes sur le marché français : test
empirique, FINANCE, Vol 9 N°1.
 DEWENTER K. and WARTHER V. (1997), Dividends, asymetric information, and
agency conflicts : Evidence from a comparison of the dividend policies of japanese and
US firm Working paper.
 EADES K., HESS P. and KIM E.H. (1984), On interpreting security returns during the
exdividend period, Journal of Financial Economics, 13.
 EADES, HESS and KIM (1985), Market rationality and dividend announcements,
Journal of Financial Economics, 14.
ANNEXURE
QUESTIONNAIRE ON ANNOUNCEMENT EFFECT
67
PERSONAL INFORMATION
Name of the respondent: ………………………………………………..
Occupation: …………………………………………………………………….
Gender Male Female
Age 20-30 30-40 ABOVE 40
1. Are you aware about the dividend announcements made by the companies?
 Yes
 no
2. Which type of companies you most prefer for investing?
 Large companies
 Medium companies
 Small companies
3. Which are the most important sources from which you obtain information about
announcement?
 Newspaper
 Television
 Internet
 All of these
4. According to you what type of companies are most frequent in announcement of their
dividend?
 Manufacturing companies
 IT companies
 Telecom companies
 Trading companies
 Infrastructure companies
 Banking and Finance companies
5. Which type of announcement you think is most effective in pushing the prices of shares?
68
 Buyback
 Joint Venture announcement
 All of these
6. Which type of announcement you think is most effective in falling the prices of shares?
 Buyback
 Joint Venture announcement
 All of these
7. Which of the following influence the stock prices more?
 Pre-announcement
 Post-announcement
8. Do you go by the announcements before investing in shares of any company?
 Strongly agree
 Agree
 Neutral
 Disagree
9. Do all the stocks react to dividend announcements?
 Strongly agree
 Agree
 Neutral
 Disagree
69
10.Do you think that dividend announcements affect your investing decision?
 Strongly agree
 Agree
 Neutral
 Disagree
11.What is your action after announcement is made?
 You purchase more shares of that company
 You sell the shares
 Do nothing and wait
12.What do you do when you receive any information about future announcement?
 React immediately
 Wait for the conformation
 Do nothing
13.For how much time do you think the effect of dividend announcement is on the stock prices?
 Temporary
 Atleast few days
 Permanent
70

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TABLE OF CONTENTS

CHAPTER 1: INYRODUCTION AND RESEARCH METHODOLOGY…………..3

1.1 INTRODUCTION ………………………………...............................4

1.2 OBJECTIVE OF THE STUDY……………………………………….6

1.3 LITERATURE REVIEW……………………………………………..7

1.4 RESEARCH METHODOLOGY………………….............................11

CHPATER 2: DATA ANALYSIS AND INTERPRETATION………………………13

2.1 SECONDARY ANALYSIS…………………………….....................14

2.2 PRIMARY ANALYSIS………………………………………….......34

CHAPTER 3: FINDINGS AND CONCLUSION ……………………………………62

TABLES PAGE NO.

INTRODUCTION AND RESEAECH

OBJECTIVES OF THE STUDY

 To study the trend of prices at Pre-announcement and Post-announcement period.

 To study the awareness level of the investors regarding Dividend Announcements.

 To study the effect of Dividend Announcement on investing decision of Individual investor.

• Statement of the problem

Sample Unit: INVESTORS FROM CHANDIGARH, MOHALI AND PATIALA

DATA INTERPRETATION AND ANALYSIS

SECONDARY DATA ANALYSIS

INFOSYS TECHNOLOGY LTD.

Dividend: Interim Dividend of 120%

Dividend: Final Dividend of 60%

MARUTI SUZUKI INDIA LTD.

BHARTI AIRTEL LTD.

RELIANCE COMMUNICATIONS Ltd.

RELIANCE INFRASTRUCTURE LTD.

Dividend: Final Dividend of 63%

Dividend: Final Dividend of 70%

 Reliance Infrastructure comes under Infrastructure companies’ category and this

INFRASTRUCTURE DEVELOPMENT FINANCE COMPANY LTD.

ICICI BANK LTD.

Dividend: Final Dividend of 110%

HDFC BANK LTD.

Dividend: Final Dividend of 120%

PRIMARY DATA INTERPRETATION AND ANALYSIS

Q: 2 Which type of companies you most prefer for investing?

Investors Large Companies Medium companies Small companies

Business man(30) 16(53.33%) 11(36.67%) 3(10%)

Service man(40) 24(60%) 11(27.5%) 5(12.5%)

From Table-2 Figure-2 following interpretation has been done:

 Consolidated interpretation of data:

Investors Newspaper Television Internet All of these

From Table-3Figure-3 following interpretation has been done:

 Consolidated interpretation of data:

Investors Manufacture IT Telecom Trading Infrastructure Banking

From Table-4 Figure-4 following interpretation has been done:

 Consolidated interpretation of data:

Investors Dividend Buyback JointVenture Change in Govt. Change in All of

From Table-5 Figure-5 following interpretation has been done:

Investors Dividend Buyback JointVenture Change in Govt. Change in All of

From Table-6 Figure-6 following interpretation has been done:

 Consolidated interpretation of data:

Q: 7 Which of the following influence the stock prices more?

Business man (30) 7 23

From Table-7 Figure-7 following interpretation has been done:

 Out of 30 Business men 7 said pre-announcement and 23 said post-announcement and in

 Consolidated interpretation of data:

Q: 8 Do you go by the announcements before investing in shares of any company?

23% Strongly agree

Q:9 Do the Stocks react to dividend announcements?

Investors Strongly Agree Neutral Disagree Strongly

20% 40% Strongly agree

Q: 10 Do You think that Dividend Announcements affect your investing decision?