Bpi

DIVIDEND POLICY REVIEW
Declaration of dividend is one of the major factors, which affects the riches of the accompany. The alliance between declaration of dividend and the wealth of the company are be by various theories. They are as follows

1.Walter Approach.
2.Gordon Approach.
3.Modogliani and miller approach.

The Modigliani miller approach is the most suitable approach for the modern companies, which put that the dividend pay out ratio is indirectly proportional to the wealth of the company. By retaining the profit the company can do overbold investment and earn more profit. Hence for increasing the wealth of the company, the company has to declare minimum dividend.

For maintaining the reputation in the commercialise the company has to declare a high dividend. Then simply the investors go away trade the share of the company more frequently in the market. Frequent trade will increase the motivation for the share and hence the market price of the share will increase.

With respect to Modigliani miller approach, TVS motors has to declare a least heart of dividend, at the same time the dividend should be slightly high then the previous year for maintaining its reputation in the market, as well as to increase the value of the company.





Let us see the Dividend for last 5 years

In the year 2003-04 the dividend is 1.30
In the year 2004-05 the dividend is 1.30
In the year 2005-06 the dividend is 1.30
In the year 2006-07 the dividend is 0.85
In the year 2007-08 the dividend is 0.70

As the dividend per share keeps on decreasing because the sales got reduced and profit also get reduced. From the year 2003 to 2006 the dividend is inclined as 1.30. Even though the sales is increased the company didnt increased the dividend because they wanted to retain some amount for their future projects. As company is planned to open new-fangled plants in Himachal Pradesh and Indonesia. Also company planned to introduce the trine wheeler vehicle. They retained their profit....If you want to get a sufficient essay, order it on our website: Orderessay



If you want to get a full essay, wisit our page: write my essay .