Description
This corporate finance PPT explaining IT and banking sector and companies HUL, RIL, SBI by Regression model
Dividend Policy of Indian Firms
Dividend Policy
• Dividends are distribution if cash to shareholders • Theoretically if the return on reinvestment is less than the required return, investor prefers dividend.
Objective
• Empirical examination of the dividend policy of Indian Firms • Sector Considered: 1. IT 2. Banking • Individual Firms considered: 1. HUL 2. RIL 3. SBI
General Regression Model
• Dividend(t) = Constant+b1*PAT(t)+b2*dividend(t1)+b3*Sales(t)+b4*Depreciation(t)+b5*Capex( t)+b6*Debt-equity ratio+b7*current ratio+b8*cash flow+b9*share price (t) Individual Companies* • Regression analyses for time series data.
*( “Leading determinants of dividend policy- a case study of Indian Banking Industry”- Karam Pal and Puja Goyal, Decision, Vol 34,No2, December 2007)
Models Used
Sector Wise Lintners Model*: • Dividends is a function of 1. Annual Variation in dividends 2. Proportion of PAT Regression analyses done on Cross Sectional Data taken across a specific sector.
*( “Leading determinants of dividend policy- a case study of Indian Banking Industry”- Karam Pal and Puja Goyal, Decision, Vol 34,No2, December 2007)
SBI
• R Square- 0.997
Coefficientsa Standardize d Coefficie nts Beta t -3.254 -.021 .114 -.296 -.295 .070 .074 1.208 .190 .113 -.140 2.654 -2.484 -3.643 1.558 1.816 4.496 3.226 1.677 Sig. .009 .892 .024 .032 .005 .150 .099 .001 .009 .124 Unstandardized Coefficients Model 1 B (Constant) Dividend_last_yea r PAT Cash_flow Depreciation Current_ratio Debt_equity Sales Capital_expenditu re Share_price a. Dependent Variable: Dividend_paid -592.450 -.029 .214 -.005 -.494 136.255 11.332 .031 .234 .128 Std. Error 182.074 .206 .081 .002 .136 87.458 6.240 .007 .073 .076
HUL
• R square – 0.992
Coefficientsa Standardized Coefficient s Beta t -.338 -.356 .242 -.029 1.475 -.272 -1.281 -.346 .357 1.332 -1.384 3.171 -.184 2.479 -.897 -1.387 -3.116 1.051 4.812 Sig. .745 .209 .016 .859 .042 .399 .208 .017 .328 .002
Unstandardized Coefficients Model 1 B (Constant) Shareprice debtequity currentratio Sales Depreciation grossFixedAssets Cashflow Lastdividend PAT a. Dependent Variable: Dividend -229.549 -3.288 662.376 -79.593 .242 -3.805 -1.054 -.711 .411 1.352 Std. Error 678.880 2.375 208.881 433.123 .097 4.240 .760 .228 .391 .281
Reliance
• R square- 0.945
Coefficientsa Standardize d Coefficie nts Beta t 1.012 -.816 -.082 .236 .076 -.053 -.079 .983 .082 .443 -5.007 -.371 1.800 .205 -.343 -.760 2.124 .517 .990 Sig. .335 .001 .718 .102 .842 .738 .465 .060 .616 .346 Unstandardized Coefficients Model 1 B (Constant) Dividend_paid_last_ye ar PAT Cash_flow Depreciation Current_ratio Debt_equity sales Capex Share_price a. Dependent Variable: Dividend_paid 403.593 -1.006 -.161 .072 .021 -83.137 -146.012 .017 .004 .345 Std. Error 398.724 .201 .434 .040 .103 242.173 192.086 .008 .008 .349
IT Sector
• R square- 0.9671
Coefficientsa Standardized Coefficien ts Beta
Model 1
Unstandardized Coefficients B Std. Error (Constant) -45.541 PAT08 Dividend07 -.569 .213 24.512
t -1.858
Sig. .076
.552
.055
1.305
10.023
.000
-.348
-2.674
.014
a. Dependent Variable: Dividend08
Banking Sector
• R square – 0.992
Coefficientsa Standardize d Coefficie nts Beta t -2.385 Sig. .024
Unstandardized Coefficients Model 1 (Constant) Dividend_20 08 PAT_2009 B -19.729 Std. Error 8.273
.679
.104
.051
.009
.546
.473
13.244
11.463
.000
.000
a. Dependent Variable: Dividend_2009
Conclusions
• IT and Banking sector, last years dividend and PAT have a significant effect on the current years dividend. • Reliance- last years dividend, cashflow and sales are significant factors • SBI- PAT, Cashflow, depreciation, sales, capex, D/E are significant factors • HUL- PAT, D/E, Sales, Cashflow
doc_226351786.pptx
This corporate finance PPT explaining IT and banking sector and companies HUL, RIL, SBI by Regression model
Dividend Policy of Indian Firms
Dividend Policy
• Dividends are distribution if cash to shareholders • Theoretically if the return on reinvestment is less than the required return, investor prefers dividend.
Objective
• Empirical examination of the dividend policy of Indian Firms • Sector Considered: 1. IT 2. Banking • Individual Firms considered: 1. HUL 2. RIL 3. SBI
General Regression Model
• Dividend(t) = Constant+b1*PAT(t)+b2*dividend(t1)+b3*Sales(t)+b4*Depreciation(t)+b5*Capex( t)+b6*Debt-equity ratio+b7*current ratio+b8*cash flow+b9*share price (t) Individual Companies* • Regression analyses for time series data.
*( “Leading determinants of dividend policy- a case study of Indian Banking Industry”- Karam Pal and Puja Goyal, Decision, Vol 34,No2, December 2007)
Models Used
Sector Wise Lintners Model*: • Dividends is a function of 1. Annual Variation in dividends 2. Proportion of PAT Regression analyses done on Cross Sectional Data taken across a specific sector.
*( “Leading determinants of dividend policy- a case study of Indian Banking Industry”- Karam Pal and Puja Goyal, Decision, Vol 34,No2, December 2007)
SBI
• R Square- 0.997
Coefficientsa Standardize d Coefficie nts Beta t -3.254 -.021 .114 -.296 -.295 .070 .074 1.208 .190 .113 -.140 2.654 -2.484 -3.643 1.558 1.816 4.496 3.226 1.677 Sig. .009 .892 .024 .032 .005 .150 .099 .001 .009 .124 Unstandardized Coefficients Model 1 B (Constant) Dividend_last_yea r PAT Cash_flow Depreciation Current_ratio Debt_equity Sales Capital_expenditu re Share_price a. Dependent Variable: Dividend_paid -592.450 -.029 .214 -.005 -.494 136.255 11.332 .031 .234 .128 Std. Error 182.074 .206 .081 .002 .136 87.458 6.240 .007 .073 .076
HUL
• R square – 0.992
Coefficientsa Standardized Coefficient s Beta t -.338 -.356 .242 -.029 1.475 -.272 -1.281 -.346 .357 1.332 -1.384 3.171 -.184 2.479 -.897 -1.387 -3.116 1.051 4.812 Sig. .745 .209 .016 .859 .042 .399 .208 .017 .328 .002
Unstandardized Coefficients Model 1 B (Constant) Shareprice debtequity currentratio Sales Depreciation grossFixedAssets Cashflow Lastdividend PAT a. Dependent Variable: Dividend -229.549 -3.288 662.376 -79.593 .242 -3.805 -1.054 -.711 .411 1.352 Std. Error 678.880 2.375 208.881 433.123 .097 4.240 .760 .228 .391 .281
Reliance
• R square- 0.945
Coefficientsa Standardize d Coefficie nts Beta t 1.012 -.816 -.082 .236 .076 -.053 -.079 .983 .082 .443 -5.007 -.371 1.800 .205 -.343 -.760 2.124 .517 .990 Sig. .335 .001 .718 .102 .842 .738 .465 .060 .616 .346 Unstandardized Coefficients Model 1 B (Constant) Dividend_paid_last_ye ar PAT Cash_flow Depreciation Current_ratio Debt_equity sales Capex Share_price a. Dependent Variable: Dividend_paid 403.593 -1.006 -.161 .072 .021 -83.137 -146.012 .017 .004 .345 Std. Error 398.724 .201 .434 .040 .103 242.173 192.086 .008 .008 .349
IT Sector
• R square- 0.9671
Coefficientsa Standardized Coefficien ts Beta
Model 1
Unstandardized Coefficients B Std. Error (Constant) -45.541 PAT08 Dividend07 -.569 .213 24.512
t -1.858
Sig. .076
.552
.055
1.305
10.023
.000
-.348
-2.674
.014
a. Dependent Variable: Dividend08
Banking Sector
• R square – 0.992
Coefficientsa Standardize d Coefficie nts Beta t -2.385 Sig. .024
Unstandardized Coefficients Model 1 (Constant) Dividend_20 08 PAT_2009 B -19.729 Std. Error 8.273
.679
.104
.051
.009
.546
.473
13.244
11.463
.000
.000
a. Dependent Variable: Dividend_2009
Conclusions
• IT and Banking sector, last years dividend and PAT have a significant effect on the current years dividend. • Reliance- last years dividend, cashflow and sales are significant factors • SBI- PAT, Cashflow, depreciation, sales, capex, D/E are significant factors • HUL- PAT, D/E, Sales, Cashflow
doc_226351786.pptx