Impact of Dividend Policy on Shareholder’s Wealth and Performance: A Case Study of Cement Industry

Ammara Sarwar; Bilal Aziz

Authors

Ammara Sarwar PhD Scholar University of Lahore, City Campus Lahore, (Lecturer) University of Lahore, Sargodha campus, Pakistan Author
Bilal Aziz Incharge PDC, IBM University of Engineering and Technology Lahore, Pakistan Author

Keywords:

Cement industry, Dividend policy, Performance, Shareholder’s wealth, financial market, financial policy

Abstract

The objective of present study is to extend the evidence regarding impact of dividend policy on shareholder’s wealth and performance. The study analyzes six years data from cement industries listed on the Pakistan Stock Exchange from 2011 to 2016 by applying panel data regression techniques. Financial performance measured through Return on assets and shareholder’s wealth are used as dependent variables whereas Dividend policy is incorporated as independent variable. The control variables included in the study are earning per share and size of the firm. The research findings suggest that dividend policy significantly affects the financial performance of the firms while control variables are also positively related to return on assets. It is also suggested that earning per share is positively related to share prices of firms.