The Declaration Of Language :: essays research papers

When, in the course of human language, it becomes necessary for people to create or redefine, words or phrases to express an object or an action; and to assume, among society, the acceptance and usage of these words and their definitions, in one’s own language, or idiolect. A decent respect to the opinions of mankind, requires that Americans should recognize slang adopted into language. We hold these truths to be self-evident: that language is expression of thought, in the form of speech or written symbols, that have agreed-upon meanings. That, many large speaking languages contain dialects, or other versions of languages within a community, that are different in some aspects of grammar, pronunciation, or vocabulary. That, because language is a form of one’s own ideas and expression, everyone possesses his or her own individual language, or idiolect. That, not only does perception change language, but that language changes perception. That, through the course of history, idiolects have shaped dialects, which have shaped language, which in turn, have shaped concepts. Conservatives, indeed, will dictate that languages will follow a narrow path toward a standard language. And accordingly, expression will follow the rules and guidelines that limit thought, rather than the ability to rethink old vocabulary and enrich new ones. When we speak, write, learn, and think in a slowly evolving vocabulary, which does not adapt to the more rapid introduction of cultures, concepts, fashion, and technology, we must add new meaning to conventional vocabulary. Such has been the language of Conservative American English speakers and writers, who have discouraged the use of creative language and the use of dialects and idiolects. Many individuals have not noticed that new vocabulary is, at many times, adopted into one’s language. A large number of slang words and phrases have been considered standard in today’s daily speech. To prove this, let us claim a few of the many slang terms that have been adopted. Slang has been used, where other words seemed unfit to describe a thought or feeling: "Awesome." "Radical." "Cool." "Far Out" New words that were created to describe new technology: A "cellular" or mobile telephone. The "internet" or the computer and modem accessed information highway. "Electronic mail" or computer generated mail. A "beeper" or an electronic paging device. Metaphors, similes, and creativeness also create slang: A coward is a "chicken." Money is "bread." A "ride" is a car. One thousand dollars is a "grand." People eat "grub." Smoking marijuana is the same thing as smoking "weed" or "pot.

Adr in an Era of Globalisation: an Indian Perspective

In a country with a population in excess of a billion, and plagued by an underfunded court structure full of corrupt and ineffecient officers, we are looking at decades of stagnation, a backlog of cases in excess of 29 million, across the state-level courts, the twenty-one high courts and the supreme court. According to Global Corruption Report 2007: Corruption in Judicial Systems, Indians shelled out an estimated $600 billion as bribes to the judiciary, which is higher than the bribes paid out in any other sector in the court. This long gestation period of litigation has resulted in a large scale loss of confidence in the judiciary, with a growing number of people opting to stay away from court. Enter alternate dispute resolution. It is this plethora of people who are prime targets of an alternate dispute mechanism. The prime time solution to the snail's pace discharge of cases. The main selling point of arbitration is the speedy and cheap resolution of disputes outside of a courtroom. While arbitration is a product of a private agreement, once an arbitration award is rendered, the prevailing party can seek to have that award confirmed by the courts, and, having done so, can invoke the coercive power of the state to enforce it in the same manner as it could a court judgment. Initially received with skepticism by the courts in various countries, arbitration is now being embraced as an effective form of alternate dispute resolution. As a result of the burgeoning international trade and an explosion in the foreign direct investment numbers in the country, arbitration and other forms of alternate dispute resolution are becoming more and more indispensable. One of the major problems with foreign litigation is that foreign judgments are subject to several layers of appellate review, whereas, foreign awards are much easier to enforce in different sovereign states. Arbitration is particularly successful in fields like construction, where a certain amount of expertise is required while resolving disputes, of which there is paucity in the courts. Arbitrators are chosen from the same industry, and are generally required to resolve disputes based on fact rather than legal issues. Most companies prefer such a business approach to resolution of disputes, rather than a legal approach. Arbitration in India was first governed by the Arbitration and Conciliation Act, 1940, which was later replace by the 1996 Act. The 1996 Act was designed primarily to implement the UNCITRAL Model Law on International Commercial Arbitration and create a pro-arbitration legal regime in India. This Act was largely aimed at subduing the loopholes which allowed for excessive judicial intervention in the 1940 Act. Some of the features of judicial review The words in Section 30 of the 1940 Act read â€Å"shall not be set aside† took away the jurisdiction of the courts to set aside an award except on one or more of the grounds specified in the section. Amended in 1996, however, the section re-numbered section 34 reads â€Å"An award may be set aside only if†¦Ã¢â‚¬  Hence, the court has no jurisdiction to set aside an award on any other grounds. This amendment was brought with an intention to reduce the scope of judicial review to allow for a minimum level of court intervention. In R. S. Avtar Singh & Co. v. N. P. C. C. Ltd. , the court commented on the nature and extent of the court’s jurisdiction: It is a well settled principle of law that the award of the arbitrator who is a chosen judge of facts and of law between the parties cannot be set aside unless an error is apparent on the face of the award or it can be inferred from the award that the arbitrator has misconducted himself or the proceedings or that he has not applied his mind to the material facts. Hence, the court is not sitting in appeal on the award, nor can it re-examine the material which was adduced before the arbitrator. The court cannot examine the correctness of the award on merits nor it is obligatory for the arbitrator to give detailed reasons. Unless the court comes to the conclusion that the award is preposterous, it cannot set aside nor substitute its own decision in place of the arbitrator. In short, the arbitrator is the final judge of facts and law, and the arbitral award is not open to challenge on the ground that the arbitrator has reached a wrong conclusion or failed to appreciate the facts. Section 31 (3) of the new Act of 1996 states that an arbitral award shall state the reasons upon which it is based, unless the parties have agreed otherwise, or the award is agreed on the terms enumerated under Section 30. This was reiterated by the court in the case of Tamil Nadu Electricity Board v. Bridge Tunnel Construction Co.. The rationale behind this order of the court is to ensure that the arbitrator acts capriciously, and to give the parties assurance that the grounds for the course of action chosen by him and reasonable and just. At the same time, however, to ensure the finality of the award, reasonable of reasons given by an arbitrator cannot be challenged on merits. Why judicial review? The main purpose of arbitrator’s is to try to decide disputes correctly on the basis of the applicable law, and subsequently, explain the rationale for their decision. The need for a provision for judicial review in the field of arbitration is born out of the state’s concern to maintain the integrity of the arbitral process, and maintain a balance between party autonomy and the laws of the land. Judicial review is primarily intended to guard against arbitrariness of awards, and to ensure that the law of the land is followed within the state’s jurisdiction. No doubt judicial intervention is a requisite in the field of arbitration which lacks a certain decisional law in the matter. However, the issue to be addressed is to what extent, and an attempt is to be made to define the scope of this judicial intervention. To what extent can court’s come forward and substitute their judgment for the arbitral award? Parties who are dissatisfied with arbitration awards often call upon the courts for review. Procedurally, review is sought in an action to modify the award or set it aside; by way of defense, in a proceeding brought to enforce the arbitrator's decision; or, by way of replication, in an action where the dissatisfied party has sued on his original claim and the satisfied party has pleaded the award. One of the major problems with the 1996 Act, is that a person aggrieved by an arbitral award has to start right from the District court in order to hallenge an award. Additionally, in two recent Supreme Court decisions, Oil & Natural Gas Corporation v. SAW Pipes and SBP v. Patel Engineering, the scope of judicial review has been widened by interpreting anything contrary to â€Å"public policy† as being â€Å"patently illegal†, and since any award which contravenes Indian statutory provisions is patently illegal, it is also contrary to public policy, and hence, subject to the j udicial review of courts. Generally speaking, arbitral awards are not subject to appeal. However, in most countries, including India, there are provisions to set aside an award in extreme cases. Judicial review of foreign arbitral awards generally falls into two categories. First, the reviewing court inquires whether requirements of natural justice were observed in the arbitration proceeding and whether the arbitration agreement is valid under the applicable law. Failing so, the arbitral award will be denied recognition or enforcement on the grounds that the fundamental requirements of natural justice or legality have not been met. Subsequently, the court inquires into the merits of the award, that is, whether the arbitral body has committed an error in rendering the award. The question of judicial review, however, is a two-headed coin. On the one hand, limiting the scope of judicial review reaffirms the roots of arbitration, that is efficient and speedy resolution of disputes. Conversely, however, widening the scope of judicial review defeats the very concept of finality of an arbitral award, and hence, moving back to square one of the legal court system. Why not? The way in which the proceedings under the Act are conducted and without an exception challenged in courts has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear testimony that the proceedings under the Act have become highly technical accompanied by unending prolixity at every stage providing a legal trap to the unwary. An informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the courts been clothed with â€Å"Legalese† of unforeseen omplexity. To the critics of judicial review of arbitral proceedings, the likelihood and to an extent, inevitability of judicial review serves as a serious deterrent to individuals and companies seeking arbitration as a solution to commercial disputes. A certain school of thought views arbitration as a mere dress rehearsal for subsequent litigation, and disregards judicial review as a mere interference to the finality of the arbitral award. India is a co untry growing in leaps and bounds, with the coming of globalization. Being a country looking to attract more foreign investment, developing a fool-proof, cost-efficient and speedy legal system is vital. When a foreign company explores the prospects of investing in India, they factor in the possible legal costs, and the opportunity to settle disputes through arbitration quickly and cheaply is an attractive selling point. However, with increasing judicial intervention, and the inevitability of ending up in court, hassle-free dispute resolution is no longer a pro on their list of pro’s and con’s. Hence, the 1996 Act was passed with the objective to minimize the supervisory role of the courts in the arbitral process. The very epitome of minimal judicial intervention is contained in Section 5 of the Arbitration and Conciliation Act, 1996, which reads: â€Å"Notwithstanding anything contained in any other law for the time being in force, no judicial authority is to intervene except as provided in the Act† Section 34 of the Act imposes certain restrictions on the right of the court to set aside an arbitral award, and the limited grounds on which the award can be challenged have been enumerated. The five grounds upon which an award can be set aside as per Section 34 (2) (a) are: -Incapacity of parties -Non-existence or invalidity of arbitration agreement -Exceeding jurisdiction -Non-compliance of due process -Composition of arbitral tribunal As per Section 34 (2) (b), an arbitral award may also be set aside by the court on it’s own initiative if the subject matter of the dispute is not arbitrable or the impugned award is in conflict with the public policy of India. Public policy, however, has not been defined anywhere in the Act. Borrowing the definition of public policy from Section 23 of the Indian Contract Act, 1872: â€Å"The consideration or object of an agreement is lawful, unless – it is forbidden by law; or is of such nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies injury to the person or property of another; or the court regards it as immoral, or opposed to public policy. † The court, over the years, has subscribed to varying conceptions of public policy, swinging between the narrow view and the broader view. In Gherulal Parakh v. Mahadeodas Maiya, the court favoured the narrower view, and commented that: â€Å"†¦though the heads are not closed and though theoretically it may be permissible to evolve a new head under exceptional circumstances of a changing world, it is admissible in the interest of stability of society not to make any attempt to discover new heads in these days. † With respect to public policy in the field of arbitration, the court held in Renusagar Power Co. Ltd. v. General Electric Co. , that in order to attract the bar of public policy the enforcement of the award must invoke something more than the violation of the law of India. It was held that the enforcement of a foreign award would be refused on the ground that it is contrary to public policy if such enforcement would be contrary to: -Fundamental policy of Indian law -The interest of India -Justice or morality The court in recent times, however, has subscribed to the broader view of public policy, choosing to widen the scope of judicial review. A landmark judgment in this respect is Oil & Natural Gas Corporation Ltd. v. SAW Pipes Ltd.. The crux of the case was that the arbitral tribunal had failed to take into account Section 73 and 74 of the Indian Contract Act, 1872. The major issue, however, that it dealt with was whether the Court would have jurisdiction under Section 34 of the 1996 Act to set aside an award passed by the Arbitral Tribunal which is patently illegal or in contravention of the provisions of the Act, or any substantive law governing the parties, or is against the terms of the contract. The judgment of the court in this case, not only negated the purpose of the 1996 Act, but also widened the scope of judicial review beyond the realms provided for in the 1940 Act as well. It was held that an award is opposed to â€Å"public policy† under the same heads laid down in Renusagar Power, but also if it is: -Patently illegal -So unfair and unreasonable that it shocks the conscience of the court Another important judgment of the Supreme Court in 2005 was SBP & Co. v. Patel Engineering, which sanctioned further intervention in the judicial process. The case dealt with the appointment of an arbitrator by the Chief Justice, and the contention was that the Chief Justice could adjudicate on contentious preliminary issues such as the existence of a valid arbitration agreement. The court agreed, while holding that the Chief Justice’s findings would be final and binding on the arbitration tribunal. This judgment makes a mockery of the principle of Kompetenz Kompetenz, which is the power of an arbitral tribunal to determine its own jurisdiction, enshrined in Section 16 of the 1996 Act. This opens up a Pandora’s box of opportunity for parties to sabotage the appointment process of arbitrators and make spurious arguments simply to delay the arbitration proceedings. Looking Ahead It is easy to forget the purpose of arbitration and get carried away with the nuances of the law. Therefore, in an attempt to move forward, it is important to incorporate the very aspect of finality and amicable resolution in the contract itself. Of course the most apparent solution at the face of it is to close all doors to review of the award by incorporating a clause for the same in the contract. However, this can only be done at the risk of receiving an award not in line with the principles of natural justice. On the legislature’s part, the Arbitration and Conciliation (Amendment) Bill, 2003, currently pending before the Parliament, proposes to introduce a new section 34A, which would allow an award to be set aside â€Å"where there is an error apparent on the face of the arbitration award giving rise to a substantial question of law†. This narrows the scope for review laid down by the SAW Pipes ruling, but it still affords losing parties an opportunity to approach courts in an attempt to second – guess arbitral tribunals, very similar to the position during the applicability of the 1940 Act. An interesting avenue to be explored in the future, particularly in the case of contracts involving large sums of money, is a system of contemporary and concurrent dispute resolution, involving the establishment of Dispute Review Boards (DRBs). This system has been adopted by the National Highway Authority of India (NHAI), Maharashtra Sewerage Board and Delhi Metro in recent times. A Dispute Review Board basically consists of three experienced, respected and impartial reviewers. It is constituted before the commencement of the contract, and regular inspections are carried out to ensure smooth functioning of the contract and ensure good working conditions. This serves to familiarize the reviewers with the job process and the basic environment as well, so that in case a dispute arises, a well-informed decision can be made. In such a case, a hearing is convened where the reviewer’s hear arguments of both sides and after deliberation submit a non-binding recommendation to the contractors.

Dividend Policy And Share Price Finance Essay - Free Essay Example

Sample details Pages: 17 Words: 5202 Downloads: 6 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? This section highlights the relationship between dividend policy and share price with the views of various researchers in order to specifyconsiderateregarding the related studies. The next following part will feature the intense research by financial academic on company dividend policy to determine a link between dividend policy and value of firm. This section will get sum up after showing different researchers outlook over Indian Scenario. Dividend Policy and Share Price When year 1980s numerous share market literatures saw the present value of dividends to be prevailing determinant of market return on stocks. As per LeRoy and Porter and Shiller (1981), they reasoned that under surmise of consistent discount component, stock costs were excessively volatile to be steady with the movement of future dividends. Wohar and Mark (2006) stated that the corrosion of stock price movement is quit sensitive to real dividend growth as well. Though, Cochrane (1992) and Timmerman (1995) contended that stock price changes might be described by time- varying markdown rate and future abundance return. The founding build by Cochrane (1992) on variability of abundance return is to be more essential than the variability of dividend growth. Don’t waste time! Our writers will create an original "Dividend Policy And Share Price Finance Essay" essay for you Create order Nishat and Irfan (2003) investigated the dividend policy and stock price movement in Pakistan. Both the dividend policy measures, dividend yield any payout proportion, have noteworthy effect on the share price movement. Moreover, their outcome also upkeep the arbitrage realization effect, duration effect and information effect in Pakistan. The approachability of dividend yield toward stock price movement expanded but payout ratio is having noteworthy effect at a lower level if importance only. An auspicious firm earns income. The profit spread to shareholder as dividends. In this way, the link between companys profit and dividend payout is explored by Amidu and Abor (2006) in Ghana. They thought that dividend payout proportion furnished firm with no usually accepted recommendation for the level of dividend payment that will boost share value. In this sense, share price movement is act contrariwise with the dividend payout ratio. Amidu and Abor (2006) believe is reinforced by the recognizing that they done in Ghana, in which their examination consequences demonstrated a statistically meaningful and positive connection between profitability and dividend pay out ratio. In the interim, the theory on the negative connection between share value and dividend payout ratio is affirmed as well. As per Graham and Dodd (1951) and Gordon (1959), they contended that an increase in dividend payout advances to higher stock price (companys value) and bring down the cost of equity. Though, some experimental indicated the inverse position. Peterson (1985) reported that with high-elevated dividend payout ratio, heightened returns are needed by firms shareholder, and this is lead to lower share price. Baker, Powell and Veit (2002) have researched the link between dividend policy, firm value and share price movement. They found an optimal dividend policy strikes an offset in middle of present dividends and future growth that maximize stock price. They also found that stock price volatility is low if dividend approach is stable. Additionally, the smoothing theory suggest that the dividend determination is the outcome of past and current earning which manager modifies firms dividend payout to some target level. In the mean time, the indicating speculation indicates that dividend have projecting power of future earning and share prices (Goddard, McMillan and Wilson, 2006). In different statement, there is a positive relationship between dividend, earning and share price. Dividend decisions are joined to companys future anticipated income, and dividend updates ought to indicate future earning updates and price changes as well. This moreover upheld by the consequence of the study work of Goddard, McMillan and Wilson (2006) in which there is a strong proof of a contemporaneous connection between share price, dividend and profit for 137 United Kingdom Production and Utility groups. Amidu and Abor (2006) analysis infer that, profitable firms will almost always pay high dividend. The outcome additionally demonstrates negative relationship between dividend payout and risk. Firm which encountering earning volatility identify, its difficulty to pay dividend, along these line, the firm may pay less or no dividend to their shareholders. In this sense, the outcome indicates the vital relationship between dividends and earning and this connection could straight control that movement in share price. The firm may encountered high share price volatility if the firms earning volatility is influenced the decrease of dividend payment. Selective review of Literature After highlighting the correlation between dividend policy and share price, this part feature the review from various researchers over the subject: Experimental researches led to see the impact of dividend policy on stock price first incorporate the work of Linter. Linter (1956) reviewed the different determinants of corporate dividend policy and its impact on firms market value by managing the interview of top management of 28 firms. Effect of his investigation indicates that Firm Market Value relies on the Dividend Payout. His outcome further demonstrate that firms wish to follow the stable dividend payout policies and for this reason they need to alter their profit. Baskin (1989) thought about the effect of dividend policy on stock price volatility and found converse connection between stock price and dividend strategy. Further in his study, he demonstrated that there is noteworthy connection among Dividend Yield and price volatility. Profit, Firms size, Debt Level, Growth level and Dividend Payout in addition have a noteworthy effect on stock returns and dividend yield. Gordan(1963) gave the notion of dividend relevance and outcome of his research demonstrate that dividend policy have huge positive influence on stock price. Further he determines that the firm those pay higher amount of dividend to their shareholders, encounters less risk in terms of stock price volatility. Allen Rachim (1996) likewise focused the connection between dividend policy and stock price but found no connection in the middle of Dividend yield and stock prices. Fama and French (2001) analyses the issue of lower dividend paid by corporate firm over the period 1973-1999 and the components answerable for the downfall. Specially they examine whether lower dividend were the outcome of changing companys characteristics or lower tendency to pay on the part of the company. They recognize that proportion of firm paying dividend has dropped from a crest of 66.5 percent in 1978 to 20.8 percent in 1999. They ascribe this decay to the modifying characteristics of firms: the decline in the incidence of dividend payer is in part due to an increasing tilt of publicly traded firms toward the characteristics small size, low earnings, and high growth of firms that typically have never paid dividends Baker, Veit and Powell (2001) analysis the reasons that are supporting dividend policy decisions of corporate firms traded on the Nasdaq. The investigation, is grounded on the sample survey (1999) response of 188 firms out of the total of 630 firms that dividends in every quarter of calendar years 1996 and 1997, considers that the following four factors have a noteworthy effect on the dividend determination: pattern of past dividends, stability of earning and the level of present and future projected earning. The research project additionally identifies statistically important difference in the importance that managers connect to dividend policy in different businesses for example financial vs. non-financial. Travlos, Trigeorgos Vafeas (2001), analyzed the conduct of Cyprus stock Market toward the declaration of dividends. Consequences of their academic work demonstrated that the declaration of cash or stock dividends has positive impact on stock price. An analysis led by Ho (2002) applicable to the dividend policy indicated the positive connection in middle of Dividend policy and size of Australian firm and liquidity of Japanese firms. He further found negative connection in middle of dividend policy and risk, which occurred in case of Japanese firm only. Pradhan (2003) illustrated the impact of dividend payment and retained earning on Stock Market of Nepalese firms. His consequences indicated that dividend payment has convincing connection with stock price whereas retained earning has quit weak connection with stock price. Nepalese stockholders give additional weight to dividend income than capital gain. Adefila, Oladipo Adeoti (2004) thought about the reasons that can influence the dividend policy of Nigerian firms and its influence on stock price and companies value. Outcome of their investigation demonstrated that Nigerian shareholder do not utilize their stock for hypothetical purpose. They purchase stock for prestigious explanation and for get credit from banks. Their outcome in addition inferred that there is no connection between dividend payment, net earning and stock price. Nigerian firm pay dividends to their stakeholders paying little respect to their level of benefit for satisfaction of their shareholders. Additional anal ysis directed by Raballe Hedensted (2008) in Denmark for the period of 1988 to 2004 distinguished the position connection between cash dividend and return o equity, retained earning, size of firm and the previous year profit. They were unable to recognize any connection in middle of debt equity ratio and dividend decision of firm. Chen, Huang Cheng (2009) studied the impact of cash dividend on share price for the period of 2000-2004 in china. They discovered that cash dividend has quite positive impact on stock prices. When cash dividend expands stock price also increase and when the cash dividend decrease, share price decreases. Al-Kuwari (2010) studied that payout decision of the companies catalogued at GCC (Gulf Cooperation Council) stock exchange, his outcome indicated that payout decision have positive impact on company size, profitability and ownership but have negative effect on Growth Opportunities. Ali Chowdhury (2010) investigated the price movement of private commercial banks catalogued at Dhaka Stock Exchange towards the dividend announcement. The took a sample of 25 banks and their outcome indicated that stock price for 11 bank diminished, 6 bank stock price increases, whereas 8 banks stock price remained unchanged when dividend were declared. In all sum outcome of their study indicated that there is insignificant connection among stock prices and dividends. Hussainey, Mgbame Chijoke-Mgbame (2011) examined the effect of dividend policy on stake price. Consequences of their investigation demonstrated a positive connection between Dividend Yield and stock price change and negative connection between Dividend Payout ratio and stock price changes. Their outcome further showed that the firms earning, Growth rate, level of debt and size also causes the change in stock prices of UK. Indian Scenario There are vey few researchers who gave their studies in India over dividend behavior. This section summaries briefly some of these studies: In Indian connection, a few findings have examined the dividend behavior of corporate firms. Among all the researchers the main contribution in Indian studies was given by Bhattacharya (1979).Bhattacharya (1979) develop a two-period model. His model determine that it is rash for bad-prospects firms to promise high level dividends, and just good-prospects firm can promise high level dividend without hurting log-term operation. Signaling hypothesis and asymmetric information holds an essential implication that is, unanticipated dividend updates ought to be gone with by stock price change in the same direction. Krishmurty and Sastry (1971) examined dividend behavior of Indian Chemical Industry for the period of 1962-1967 and undertook crossectional information of 40 Public Limited companies. The outcome disclosed that Linter model gives exceptional demonstration of dividend behavior. Dhameja (1978) in his research tested the dividend behavior of Indian companies by ordering them into s ize group, industry group, growth group and control group. The research found there was no statistically noteworthy connection between dividend payout, on the other hand and industry and size on the other. Growth was contrariwise related to dividend payout and was found to be noteworthy. The prevailing finish was that dividend decisions are preferable described by Lintners model with current profit and lagged dividend as informative variable. Mahapatra and Sahu (1993) found cash flow as a major determinant of dividend emulated by net earning.Bhat and Pandey (1994) undertook a review (survey) of managers view to dividend determination and found that manager notice current profit as the most noteworthy variable. Narsimhan and Asha (1997) recognized that the uniform tax rate of 10% on dividend as recommended by union budget 1997-98, adjust the interest of investor in favor of high payouts. Mohanty (1999) found that the firm, which issued bonus shares, have either upheld the payout at t he pre bonus level or just diminished it marginally thereby expanding the payout to shareholders. Narsimhan and Vijaylakshmi (2002) investigated the impact of ownership structure on dividend payout of 189 production firms. Regression analysis demonstrate that promoters holding Sujata Kapoor, JBS, JIIT, Dec 2009 of September 2001 has no impact on average dividend payout for the period 1997-2000. Anand Manoj (2002) examined the outcomes of 2001 survey of 81 CFOs of Business today-500 companies in India to figure out the determinants of the dividend policy decisions of the corporate India. He used factor analytic framework on the CFOs reaction to catch the determinants of the dividend policy of corporate India. The findings uncovered that large no. of firms have target dividend payout proportion and were in agreement with Lintners study of dividend policy. CFOs utilize dividend policy as an indicating tool to pass on qualified information on the current and future prospects of the firm and therefore influence its market value. The managers outline dividend policy following thinking seriously about the investors preference of dividend and clientele effect. Sen and Ray (2003) have illustrated a noteworthy phenomenon observing the key determinants of stock price in India. The research work is based upon the stocks covering BSE index over a period 1988-2000. The experimental resea rch uncovered dividend payout is clearly the single essential factor affecting stock price. The second factor comes earning per share, which has particularly powerless effect on stock price. So the research investigated one of the important factor dividend payout ratios having effect on Indian stock price. Reddy Y.Subba and Rath Subhrendu (2005) examined Dividend trends for huge samples of stocks traded on Indian market showed that the rate of firms paying dividend declined from over 57% in 1991 to 32% 2001, and that just a few firms paid customary dividends. Dividend paying companies were less likely to be larger and additional profitable than non-paying communities, however growth opportunities do not appear to have essentially influenced the dividend policies of Indian firms. The ascent of the number of firms not paying dividend is not supported by the necessities of cash for investments. Sharma Dhiraj (2007) observationally examined the dividend behavior of select Indian firms listed on BSE from 1990 to 2005. The study investigated whether or not the dividend are still in trend in India and attempted to judge the applicability of one of the two extremely inverse schools of thoughts relevance and irrelevance of dividend decision. The study also examined the applicability of tax structure in the Indian perspective. The finding offered mixed and uncertain outcomes about tax theory showing that the alteration in the tax structure does not have a significant impact on dividend behavior of firm. Thirumalvan Sunita (2005) analyzed the effect of share repurchases Dividend announcement on stock price in the connection of Indian corporate sector throughout the period (2002-2004). They examined the signaling effect of stock repurchases and dividend announcements. The research studied examined abnormal returns across various repurchase level. They have taken the firms recorded in the BSE index for the motivation behind experimental studies. The study blankets the effect on stock price five days prior and after the dividend declaration. The outcome displays the upward trend of share price movement after the dividend declaration. The essential purpose of their finding is that existed just for a day following the declaration. After which the degree of positivism of allotment begins declining. Their conclusion indicates the market reaction in the Indian context to events or declaration for example share repurchases and dividends for the most part vary around day or a few. Various clashing theoretical models, all needing strong experimental support, outline latest attempts by examiners in finance to describe the dividend phenomenon. However to come with strong result an serious study of all theoretical models together with experimental evidence is required. The noteworthy literary work on dividend policy have been unable to get a accord on study on the general dividend hypothesis in the last five year that can either illustrate the method of dividend decision making or foresee an optimal dividend policy. Consequently it ends up being essential to study dividend behavior of Indian companies utilizing the outline of empirical models. The main objective of this study is to compare the study done by different researchers in Indian context over the impact of dividend policy on market value of firm. The next chapter will demonstrates the different methodologies used by these researchers in order to study. Chapter 4: Research Methodology This chapter highlights the methodology adopted in the research has been discussed here. It frame out the different measurements of the research and the method keep on for the comparison of researches of different researchers in the reference of Dividend Policy and Share value for the study. For this purpose the study has collected the data from the research paper of the researchers and demonstrated the different methodologies by different researchers. Further tools and techniques followed by the researchers for understanding the subject are also bought in this part. The main approach followed in this paper is qualitative research in which comparison has been done between the researches of three researchers. The comparison is basis on availability of data through website and journals. The comparison study has been performed because of the expensiveness and free unavailability of data of different sectors, which led to approach a qualitative research rather than quantitative. By follo wing comparative study this paper aim to find out the most favorable research among three. The data used in this research is all secondary data. Introduction of Research Methodology Research Methodology is a way to discover the consequence of a given situation on a particular matter or situation that is likewise pointed as research problem. In Methodology, researchers utilizes distinctive criteria for solving/searching the given study problem. Diverse origins utilize distinctive sort of techniques for tackling the problem. Assuming that we consider the expression Methodology, it is the way of looking or tackling the study difficulty. But every research is incomplete without designing it. This research design is conducted on two approaches: Qualitative and Quantitative. Qualitative research: Qualitative research is the methodology for the most part connected with the social constructivist standard, which highlights the socially built nature of actuality. It is in regards to recording, examining and endeavoring to reveal the deeper importance and meaning. Quantitative research: Quantitative research is usually connected with the positivist/post positivist paradigm. It normally includes gathering and changing over information into numerical shape with the intention that statistical figuring could be made and result drawn. Research Paradigm means a purpose by which researchers think about how they develop knowledge. The terminologies of research paradigm are positivism, interpretivism and realism.The main components of a paradigm are ontology, epistemology and methodology. Mainly the researches are done on the basis of certain collective data. These data are of 2 types: primary data and collective data. Primary data are those data that are collected from questionnaires, observations, interviews, data processing and so on. Whereas secondary data are those, which are collected from journals, internet, government publication, published books, newspapers and magazines etc. The data collected for this research is mainly basis on secondary data, which are gathered from journals and websites. Research Strategy by Different Researchers The research is comparative study of different researchers over different sectors of Indian firms. The study compared the different methodologies used by Pani (2008), Sujata Kapoor (2009), R. Azhagaiah Sabari Priya (2008). The studies of these researchers are chosen because of availability of their data and they have given revolutionary results in this reference. These researchers have contributed a lot in the research of dividend policy and share value over Indian firms. Following are outline of the different dimensions used by these researchers: Pani (2008) Pani (2008) in his research discussed the classical linear regression model and other tests. In his research he represents the hypothesis that dividends affect stock price or market value of the firm. The market value of the firm can be represented as: Market value of the Firm = f net profit, Dividends . Retained Earning The market value of the firm here is essentially acted for on the core of accounting Earning Analysis. Net profit in this equation is determined from the current investment of the firm. As higher the net profit the higher can be the stock price. The ratio of dividends to retained earnings is the factors on which market value of the firm also depends for the reason that the profit is mainly discriminated either dividend or retained earnings. In his research, he focuses over the context-specific Panel-Data models including the control variable like leverage ratio and the size of the firm. He has observed firm effect and time effect through the panel data estimation during the sample period. For his research purpose he derived the proposed model to analyze the impact of dividends on stock return. He has analyzed the issue over his proposed derived model. Instantaneously he has discussed other option, which were available for the analysis. He has analyzed the result of different industry aggregately in his study. The proposed Model is here: Macintosh HD:Users:rahul:Desktop:Screen shot 2012-09-18 at 9.54.18 PM.png Where, SZ = Ln (total Assets)  µi = Firm Specific component Eit= Disturbance Term Then he divided the null hypothesis or D/R ratio affects stock returns i.e. Ho: D/R affects Vit. Firstly he examined the result of the classical linear regression model and secondly panel data estimation. He defined four basic models, which he has estimated earlier continuing toward final examination. yit= ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±+ Eit(No group effect or xs) yit=ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±i +Eit(Group dummies only) yit =ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±+ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²Xit + Eit(Repressors only) yit =ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±i+ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²Xit +Eit(Xs and group effects) Model 1 on 2: H0: (no group effects on the mean of y) Model 1 on 3: H0: (no fit in the regression of y on xs) Model 1 on 4: H0: (no group effects or fit in regression) Model 2 on 4: H0: (group effects but no fit in regression) Model 3 on 4: H0: (fit in regression but no group effects) He has examined the set of data for using the panel data models with the help of above five different hypotheses. For the Food and Beverage, Mining Industry and Non-metallic Industry, the LR, F and LM test along with Hausman Specification Test supports the use of fixed effect models however for other services, Textile Industry and Mining Industry, the diagnostic test rejects the use of fixed effect models. Data Gathering In study he gathered all the data to achieve his objective from Prowess database of the CMIE (Centre for Monitoring on Indian Economy) in India. A sample of 500 companies from A1 and B1 groups of shares is chosen for experimental analysis. These samples were dividend into six different industries namely Electricity, Food and Beverage, Mining, Non-metallic, textile and service sector. His motive behind choosing these companies is the consistency with the dividend payment history for the study period 1996-2006. Though, his study has theorized the dependent variable(market value of firm) and the descriptive variables for example size of the firm, dividend to retain earning ratio and debt to equity ratio. The stock return is reflected as proxy for the market value of the firm as dependent variable and Ln (total assets of the firm) have been occupied as a proxy for rest of following variable. Sujata Kapoor (2009) Sujata Kapoor (2009) in her research has utilized several different tool and techniques and models namely Lintner model and event study to accomplishresearch objectives. Linter Model Linter(1956) introduced a model to concentrate on the determinant of the dividend behavior of American corporation considering that the dividend payout is a role of net current earning after tax(PAT) and dividend paid during the previous year i.e. lagged dividend (Div t-1). Companies choose to payout a settled proportion of their net profit as dividend to regular stakeholders; however in the view of their well known preference for constant dividends may attempt to succeed the target level just by a fraction of the amount demonstrated by the target payout ratio whenever profit changes. The above speculative definition of Lintner has been utilized as an estimating equation for corporate dividend in her study, which is as follow: D*it = ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±iEit Dit -Di(t-1) = ai + Ci {D*it -Di(t-1)}+uit Where, D*it = desired dividend payment during period t Dit = Actual dividend payment during period t ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±i = target payout ratio Eit = earning of firm during period t ai = a constant related to dividend growth Ci = partial adjustment factor uit = error term Dit Di(t-1) = ai + Ci{ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±iEit Di(t-1)} + uit Dit = a + ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±iCitEit + (1-Ci)Di(t-1) + uit Simplified further in the form of multiple regression equation, Dt=a+ ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±iEit + Ci D (t-1) +uit To comprehend the connection between dividend and earning (PAT) a Multiple Regression Analysis was performed in respect of companies, which are constituent of CNX IT file, CNX FMCG file and CNX service Sector Index individually, for the panel data of 9 years i.e. from 2000 to 2008. Lintner Model Used: Y=ÃÆ'Ã… ½Ãƒâ€šÃ‚ ± + ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1X1+ ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2X2 + uit + ÃÆ'Ã… ½Ãƒâ€šÃ‚ µit Where, Y= dependent variable (equity dividend in Rs. crore during period t) X1= independent variable (PAT) in Rs. Crore ÃÆ'Ã… ½Ãƒâ€šÃ‚ ± = Constant ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1= regression coefficient of PAT (target payout ratio) X2= Equity dividend during period t-1 ÃÆ'Ã… ½Ãƒâ€šÃ‚ ² 2= regression coefficient of dividend during period t-1 i.e. (1-c) and c is the adjustment factor. uit = firm specific components ÃÆ'Ã… ½Ãƒâ€šÃ‚ µit = disturbance term Therefore, Target Payout ratio * adjustment factor = ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1 ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±i* Ci = ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1 ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±i*(1-ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2) = ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1 This implies ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±I = target payout ratio = ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1/(1-ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2) Speed of adjustment factor=(1-ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²2) Hence, the regression results structures the groundwork of testing the applicability of Lintner model, which is a finance classic in each of he sectors. Event study To examine the impact of dividend announcement on shareholders wealth in the prescribed sectors in India Event Study approach has been utilized. Firstly, find the announcement date in each of the industries for the sample period from 2001 to 2008. Thus, 168-announcement date were taken from IT sector, 199 dates from FMCG and 202 from service sector. Secondly, 41 days has been taken which include 20 days before the events and 20 days after the events. Thirdly, daily-adjusted closing prices were taken for estimatingpredictable returns as per Market model. Fourthly, the aggregate abnormal returns were calculated with the help of average abnormal return to watch the reaction over a period of time. Finally, standard deviation of abnormal return has been used to calculate t-statistic to cross sectional. To evaluate the stock price reaction to dividend announcements, Return (Rit), which is the time t return on security i were figured as (Pit-Pit-1)/Pit-1 where Pit is the balanced closing price of the stock I on day t. Pit-1 is the balanced closing price of stock i on day t 1 Rit = (Pit Pit-1)/Pit-1 Likewise, the following formula were used to calculate return on Market Index, Rmt =(It -It-1)/It-1 After that following equation will be use to calculate abnormal return for each of the day in the event window: ARit = Rit -E (Ri,t) , t=(-20,-19ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦20) Then, market model is used to estimate expected return. Estimation window of 150 days have been used, according to following equation: E(Rit) = ai + bi Rm,t+ei,t In which,Rm,t is the return on the market portfolio on day t substitute specific sector indices, ei,t is the random error term and ai and bi are market model parameter. According to the following formula the abnormal returns (ARs) averaged across the sample of firm: AARs =Avg(ARt) = (1/N) ARit Where, N is the number of sample observations. Therefore, to find out daily average abnormal returns, the abnormal return must divide by the number of days. The cumulative abnormal returns from day t1 through t2 ,CARt , are : CAARt = ÃÆ'Ã… ½Ãƒâ€šÃ‚ £ Avg (ARt) where t = t1 to t2 CAAR can be positive and negative. Assuming that CAAR is negative in periods following dividend announcements, this intimates dividend announcements do not convey information about future earning and cash flows of the firm. A positive CAAR demonstrate allocation of dividend adds to shareholder value by passing on good news to the market. We utilize a 41day event window period beginning from -20 to +20 days relative to dividend announcement day (0 day). For the motive of analysis both interim and final dividend announcements has been taken. To calculate the t-statistic, to start with, all abnormal returns identical as: SAR it= ARit / Si (AR) Where, Si (AR) represents the standard deviation of the abnormal returns of stock i in the estimation period. For the sample of N observation for every day t in the window the t-statistic is calculated as: t(SAR) = (ÃÆ'Ã… ½Ãƒâ€šÃ‚ £i=1 to N SAR it) .1/ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡N Data Gathering Sujata Kapoor (2009) has gathered the secondary data for methodical and experimental study from Prowess database of CMIE (Centre for Monitoring Indian Economy). The analysis has been done on panel data in Lintner model. In this analysis the sample period is taken from 2000 to 2008. R. Azhagaiah Sabari Priya .N (2008) In their research, they haveanalyzed the impact of dividend policy on shareholder wealth over the organic and inorganic chemical industry of India. In that the have used multiple regression method and stepwise regression models by taking DPSit (Dividend per Share), RE it (Retained Earnings per Share), Pet-1 (Lagged Price Earning Ratio) and MPSit-1 (Lagged Market Price) (MVit-1) as independent variable, and MPSit (Market Price Per Share) as dependent variables. With the help of F value the co-efficient of determination (R2) has been tested, to determine the proportion of explained variation in the dependent variable. The tool used by them for analyzing data is following: MPSit = a + b DPSit + c REit + eit (1) MPSit = a + b DPSit + c REit + (PE)t-1 + eit (2) MPSit = a + b DPSit + c REit + (MPS)it-1 + eit (3) Where, MPSit Market price per share DPSit Dividend per share REit Retained Earning per share PEt-1 Lagged Price Earning Ratio MPSit-1 Lagged Market Price (MVit-1) The i denotes the ith company in the sample of n companies chosen from individual industry and every variable are measured in the ith time period. Closing price of share for year is used as a market price of a share. Mean, Standard Deviation, Multiple Regression Model and Stepwise technique has been used to analyze the data. Data Gathering Priya Azhagaiah (2008) also collected their data from PROWESS database of CMIE. The sample of 28 companies has been taken, which are registered in BSE (Bombay Stock Exchange) among them 19 were of organic and 9 were of inorganic using Multi-Stage Random Sampling Technique for the sample period of 1996-1997 to 2005 -2006. In this chapter it was easily shown that which method have they used to represent their research. This chapter has analyzed the various method, models, tools techniques utilized by Pani (2008), Sujata (2009) R. Azhagaiah Priya (2008). The table 4.1 will summarize this whole chapter in he tabular form: Table 4.1: showing the area of research and models used by three different researchers Researchers Pani (2008) Sujata Kapoor (2009) R. Azhagaiah Sabari Priya. N(2009) Area of Research Electricity industry, Food and Beverage, Non-metallic, Other industry Textile Mining IT Sector, FMCG (fast moving consumer goods), Service Sector Organic chemical companies, Inorganic chemical companies Sample Period 1996 to 2006 2000 to 2008 1997 to 2006 Models Adopted Classical linear regression model using panel data model Lintner Model Event study Multiple regression model Stepwise regression model