A Comparative Analysis of Dividend Policy on Selected Pharmaceuticals Industrial Units of India

Gopal D. Dodiya

Abstract

The distribution of earnings (past or present) among the company's shareholders in accordance with their percentage of ownership is known as a dividend. A company's dividend policy outlines how profits are allocated to shareholders. A financial decision decides how much of the profits will be paid out as dividends to the shareholders. Research on dividends has questioned how much investors value consistent dividend payments in comparison to the capital that businesses need. In this paper, researcher compare share price as per Walter Model, share price as per Gordon Model, and the market price per share of selected pharmaceutical industrial units of India. Furthermore, a framework for comprehending the connection between dividend payments, the needed rate of return, and the anticipated growth rate of dividends is offered by the Gordon Model, another essential instrument in dividend research. By applying the Gordon Model to analyze share prices, researchers may assess the impact of growth forecasts and dividend yields on market sentiment and investment decisions The analysis of market dynamics in pharmaceutical companies gives the theoretical frameworks offered by the Walter and Gordon Models a more grounded perspective. In the context of India's pharmaceutical sector, this study aims to provide insightful information on the difficult balancing act between regular dividend payments, the capital required for company expansion, and the ensuing effects on shareholder wealth. It is anticipated that the results will be useful to policymakers, investors, and industry practitioners who are looking for a more in-depth knowledge of the dynamics of dividend policy in an important area of the economy.