THE IMPACT OF DIVIDEND POLICY ON

SHARE VALUE OF COMPANIES LISTED ON

THE STOCK EXCHANGE OF MAURITIUS
By

PAYANIANDY Muruganandam
Final year project submitted in partial fulfilment of the requirements for the
degree of Bachelor of Financial Management

BSc (Hons) Financial Management

University of Mauritius

Centre for Innovative and Lifelong Learning

April 2016

TABLE OF CONTENTS
LIST OF TABLES ........................................................................................................................... iv
ACKNOWLEDGMENT .................................................................................................................. v
PROJECT/DISSERTATION DECLARATION FORM ............................................................. vi
ABSTRACT..................................................................................................................................... vii
LIST OF ACRONYMS ................................................................................................................. viii
LIST OF ABBREVIATIONS ......................................................................................................... ix
INTRODUCTION ...................................................................................................................... 1

1.
1.1

Aims and objectives .............................................................................................................. 2

1.2

Chapter Outline .................................................................................................................... 2

LITERATURE REVIEW ........................................................................................................... 3

2.
2.1

Theoretical review ................................................................................................................. 3

2.1.1

Definition ........................................................................................................................ 3

2.1.2

History of dividend policy .............................................................................................. 3

2.1.3

Dividend Irrelevance Theories: ....................................................................................... 5

2.1.3.1.

Miller and Modigliani Theorem .............................................................................. 5

2.1.3.2.

The Residual Theory ............................................................................................... 5

2.1.4

2.2

Dividend Relevance Theories: ........................................................................................ 6

2.1.4.1.

Bird-In-Hand Theory .............................................................................................. 6

2.1.4.2.

The Walter Model ................................................................................................... 6

2.1.4.3.

Signaling Theory ..................................................................................................... 7

2.1.4.4.

The Clientele Effect Theory .................................................................................... 7

Empirical review ................................................................................................................... 8

3.

OVERVIEW OF THE STOCK EXCHANGE OF MAURITIUS........................................... 10

4.

RESEARCH METHODOLOGY ............................................................................................. 12

4.1

Research Objective ............................................................................................................. 12

4.2

Research Hypothesis ........................................................................................................... 12

4.3

Data Collection .................................................................................................................... 12

4.4

Model Specification ............................................................................................................. 13

4.5

Methods of Data Analysis ................................................................................................... 13

4.6

Variables Defined ................................................................................................................ 13

4.6.1

Share Price .................................................................................................................... 13

4.6.2

Dividend per share ........................................................................................................ 14

4.6.3

Retention Ratio ............................................................................................................. 14

4.6.4

Dividend Payout Ratio .................................................................................................. 14

4.6.5

Profit After Tax ............................................................................................................. 14

4.7

Expected Results ................................................................................................................. 15

4.8

Panel Data ............................................................................................................................ 15

4.9

Time Frame ......................................................................................................................... 15

4.10

Software Used ...................................................................................................................... 16

ANALYSIS AND DISCUSSION ............................................................................................. 17

5.
5.1

Descriptive Statistics ........................................................................................................... 17

5.2

Pearson product-moment correlation coefficient ............................................................. 17

5.3

Share price and independent variables ............................................................................. 18

5.4

Auto Correlation: Durbin-Watson .................................................................................... 19

5.5

Regression Analysis ............................................................................................................ 19

5.5.1

Dividend Per Share and Share Price ............................................................................. 20

5.5.2

Retention Ratio and Share Price ................................................................................... 21

5.5.3

Dividend Payout Ratio and Share Price ........................................................................ 21

5.5.4

Profit After Tax and Share Price ................................................................................... 21

6.

CONCLUSION AND RECOMMENDATIONS ..................................................................... 22

6.1

Conclusion ........................................................................................................................... 22

6.2

Recommendations ............................................................................................................... 22

7.

LIST OF REFERENCES ........................................................................................................ 24

8.

APPENDICES ......................................................................................................................... 29

Appendix I ........................................................................................................................................ 29
Appendix II ....................................................................................................................................... 31
Appendix III ...................................................................................................................................... 32

LIST OF TABLES
Table 1: Official Markets evolution ................................................................................................ 11
Table 2: Expected results .................................................................................................................. 15
Table 3: Descriptive analysis ........................................................................................................... 17
Table 4: Pearson Correlation ........................................................................................................... 18
Table 5: Share price coefficient ........................................................................................................ 18
Table 6: Durbin-Watson ................................................................................................................... 19
Table 7: Regression analysis ............................................................................................................ 19
Table 8: ANOVA ............................................................................................................................... 20
Table 9: Goodness for fit .................................................................................................................. 20

iv

ACKNOWLEDGMENT
Writing this mini project was a special and enriching experience. I wish to firstly express
my gratitude to my supervisor Mrs. Reena Bhattu Babajee who guided throughout with her
expertise and patience.
My thanks are also extended to all the dear ones who supported and helped me, especially
my friends Karishma and Mevin who made this project a pleasant task.
Last but not least, I would like to thank my parents, my older sister Isaiarasi and my younger
brother Ganesha who were always by my side and provided me with immense moral
support and blessings throughout the duration of my mini project.

UNIVERSITY OF MAURITIUS
PROJECT/DISSERTATION DECLARATION FORM
Name: PAYANIANDY Muruganandam
Student ID: 1217700
Programme of Studies: BSc (Hons) Financial Management
Module Code/Name: DFA 4298(5) / Financial Management Project
Title of Project/Dissertation: The impact of dividend on the share value of companies listed on the
Stock Exchange of Mauritius
Name of Supervisor(s): Mrs Reena Bhattu Babajee
Declaration:
In accordance with the appropriate regulations, I hereby submit the above dissertation for examination
and I declare that:
(i)

I have read and understood the sections on Plagiarism and Fabrication and Falsification of Results
found in the Universitys General Information to Students Handbook (2016/2017) and certify
that the dissertation embodies the results of my own work.

(ii) I have no objection to submit a soft copy of my dissertation through the Turnitin Platform. I confirm
that the hard copies and soft copies, including the one uploaded through the Turnitin Platform, in
the final assignment submission link indicated by the Programme/Project Coordinator, are
identical in content.
(iii) I have adhered to the Harvard system of referencing or a system acceptable as per The University
of Mauritius Referencing Guide for referencing, quotations and citations in my dissertation. Each
contribution to, and quotation in my dissertation from the work of other people has been
attributed, and has been cited and referenced.
(iv) I have not allowed and will not allow anyone to copy my work with the intention of passing it off
as his or her own work.
(v) I am aware that I may have to forfeit the certificate/diploma/degree in the event that plagiarism
has been detected after the award.
(vi) Notwithstanding the supervision provided to me by the University of Mauritius, I warrant that any
alleged act(s) of plagiarism during my stay as registered student of the University of Mauritius is
entirely my own responsibility and the University of Mauritius and/or its employees shall under no
circumstances whatsoever be under any liability of any kind in respect of the aforesaid act(s) of
plagiarism.
Signature:

Date:

vi

ABSTRACT
This study has for objective the investigation of the impact of dividend policy on share price
of companies on the SEM. Twenty companies listed on the SEM were used as sample, for a
time period of five years from 2010 till 2014. Share price was used as dependent variable
and tested against DPS, RR and DPR. PAT was used as the control variable. Analytical
methods considered were the Pearson Correlation and a Multiple Regression. The methods
have given evidence that dividend policy has a positively significant impact on the share
price of a company and an increase in dividends paid to shareholders would cause an
increase in share value of the company.
Keywords: Dividend Policy, Share Price, DPS, DPR, RR and PAT

vii

LIST OF ACRONYMS
SEM

: Stock Exchange of Mauritius

DEM

: Development and Enterprise Market

CDS

: Central Depository System

viii

LIST OF ABBREVIATIONS
DPS

: Dividend Per Share

RR

: Retention Ratio

DPR

: Dividend Payout Ratio

PAT

: Profit After Tax

MUR

: Mauritian Rupee

USD

: United States Dollar

EUR

: Euro

GBP

: Pound Sterling

ZAR

: South African Rand

ix

1. INTRODUCTION
The dividend policy is a major financing decision that involves payment to shareholders in
return of their investments in a company. Each and every company listed follows some sort
of dividend payment pattern and it is obviously a financial indicator of the specific
company. Upon making profits, the management of the company may either retain it or pay
out the profits to the shareholders in the form of dividends. If the company decides to pay
dividends, they should institute a permanent dividend policy. Their decision relies on the
current and forecasted financial situation of the company. It is also influenced by the
preferences of investors and potential investors.
Many researchers have been arguing about the relevance of dividend policy on the
movement of share prices. This argument has generated a lot of controversies amongst
financial theories like Black, Scholes, Modigliani and Miller, Gordon and so on; leading to
two distinctive groups: dividend relevance and dividend irrelevance groups.
Dividend provides a mean of assessing the financial position of a company for stakeholders
or potential investors. As a result the shareholders can assess the capacity of the company
to generate cash given that some investors consider dividend as a major source of income.
Basically, dividend is a benefit that shareholders receive. Paying out dividend depends on
various factors such as size of business, financing limitations, investment decisions by
management and regulation of the industry as well. Graham and Dodd (1951) believed that
a dollar of dividends has four times the average impact on share price as a dollar of retained
earnings. But Modigliani and Miller (1961) in their dividend irrelevant theory pointed out
that in a perfect capital market i.e., ignoring taxes and transaction costs, a dividend policy
should not affect the value of a share at all.
Nowadays, with globalization being the pinnacle point of the business world, multinationals
have crossed borders, thus transforming investors into cross-national investors. Their
decision as to whether to invest in a firm rests merely on information provided to the public.
Dividend which might be an important factor and thus became the interest of this study.
Dividend policies may impact positively and significantly the share prices of the company
and may influence the firms choice of future dividend policies.

1.1

Aims and objectives

This study aims at analysing the relationship between dividend and share price. To achieve
the aim, the following objectives were set:
1. To carry out a desk study on dividend, dividend policies and empirical methods;
2. To select twenty companies from Stock Exchange of Mauritius which has been
listed at least from 2008 and obtain the relevant data;
3. To analyse the data using appropriate method of analysis; and
4. To discuss the resulting relationships.
1.2

Chapter Outline
Chapter 1: Introduction
The introduction constitutes the current chapter which explains the subject of interest
and states the problem being addressed. The aim and objectives are also included.

Chapter 2: Literature Review

This section outlines the theoretical and empirical studies carried out on dividend and
dividend policies.

Chapter 3: Overview of the Stock Exchange of Mauritius

This chapter is an investigation into the background of the Stock Exchange of Mauritius.

Chapter 4: Methodology
This chapter reads out the methodology used to carry out the study and defines the
variables used in the regression model.

Chapter 5: Analysis and Discussion

The results were discussed in this section.

Chapter 6: Conclusion and Recommendation

A conclusion was drawn and recommendation made for improvement of the study.

2. LITERATURE REVIEW
2.1

Theoretical review

2.1.1 Definition
People have different views on dividends and dividend policy. Some consider it as a hard
earned return on a good investment, while some are against it and consider dividend to be
an obstacle towards future prospects of a company.
Do you know the only thing that gives me pleasure? Its to see my dividends coming in.
John D. Rockefeller
John Rockefeller was the founder of the Standard Oil Company, a behemoth that was at the
top of the oil industry. He retired in 1897 and later became the worlds richest man and the
first billionaire in history.
A stock dividend is something tangible its not an earnings projection; its something
solid, in hand. A stock dividend is a true return on the investment. Everything else is hope
and speculation. Richard Russell
Our goal is to increase enterprise value. Which would you rather have us be? A company
with our stock price, and $40 billion in the bank? Or a company with our stock price and
no cash in the bank? Steve Jobs
2.1.2 History of dividend policy
Dividend policies date back as far back as the late sixteenth century. It started in Holland
and Great Britain, where captains of sailing ships began to sell financial claims to investors
who were then entitled to a share of the proceeds of the ships at the end of their voyages
(Walker, 1931). By the end of the sixteenth century, they started to trade the financial claims
on an open market in Amsterdam. They were gradually converted into share ownership
where investors would acquire share denomination which usually were the fractions of the
ships wealth. The fractions could be 1/8, 1/16, 1/32, 1/48 and also 1/56. In order to reduce
their risk of loss of proceeds from sailing ships, investors would diversify by investing in
several ships at the same time.
At the end of each voyage, there was a liquidation process that distributed profits to the
investors but this became increasingly inconvenient and cost. This gave rise to the agency

relationship between the principals who were the investors and the agents, who were the
captains. The investors confidence grew larger and the captains made regular payment of
generous dividends in return of their capital invested. This form of business gradually
evolved and soon became a joint stock company form of business. In 1613, the British East
India Company issued its first joint stock shares with a nominal a value. No distinction
was made, however, between capital and profit (Walker, 1931 p.102).
In the early stages of corporate dividend history, managers realized the importance of high
and continuous dividend payments. They found that investors preferred shares that
performed like bonds, that is, pays a regular and stable dividend. Also, in the early
nineteenth century, dividend was seen as an important source of information. The scarcity
and unreliability of financial data resulted in investors assessing the companies by the
dividend that are paid rather than the earnings. Consequently, an increased in dividend
payout reflected in rising share price. This led to managers using dividend payout to signal
the earning prospects of the companies.
Black and Scholes (1974) have argued that a firm can influence the price of its share by
changing its dividend policy. The most common argument is that firms wishing to increase
their share value would prefer cash or benefits as dividends rather that those benefits as
capital gain, therefore attracting investors to bid up the stocks of firms that pay generous
dividend compared to those paying smaller dividend. Gordon (1959) also suggested that
dividend policy affects a firms cost of capital and this supports the view that the higher
rates of paid dividends cover more of cost of capital. Miller and Modigliani (1961) on the
other hand argued that as long as firms cash flow distribution is stable and there is no tax
effect, choosing a policy of paying dividends on the stock market value has no effect.
There is another argument, hinted at by Miller and Modigliani, which suggests that dividend
policy should not matter. They say (1961, pg. 431):
If, for example, the frequency distribution of corporate payout ratios happened to
correspond exactly with the distribution of investor preference for payout ratios, then the
existence of these preference would clearly lead ultimately to a situation whose implications
were different in no fundamental respect from the perfect market case. Each corporation
would tend to attract to itself a clientele consisting of those preferring its particular payout
ratio, but one clientele would be entirely as good as another in terms of the valuation it
would imply for the firm.

2.1.3 Dividend Irrelevance Theories:

2.1.3.1. Miller and Modigliani Theorem

Before the publication of Miller and Modigliani Theorem (hereafter M&M), it was a
common belief that share value is directly proportional to dividend policy of the said firm,
that is, as dividend increases, the share increases in value. Graham and Dodd (1934) for
instance argued that:
the sole purpose for the existence of a corporation is to pay dividends
This was the result of the theory known as The Bird-in-hand, further discussed below.
But M&M was not of the same belief and claimed that subject to several assumptions,
investors should be indifferent on whether firms pay dividends or not. The value of the firm
therefore depends on the investment decisions and not the dividend policy and are based on
the perfect market assumptions which are as follows:
No difference between taxes on dividends and capital gains;
No transaction and flotation costs when securities are traded;
All participants in the market have access to the same costless information;
There are no agency conflicts; and
All participants in the market are price takers.
M&M maintained that the value of firm is based on its future earnings and investment and
decision as to which a firm pays dividends or not has no importance. Therefore, from an
investor point of view, the payment of dividends can be pointless, as a stream of payments
can be acquired simply by the proper purchasing and selling of their shares. Thus, paying a
premium in order to receive dividends in the future would be irrelevant.
2.1.3.2. The Residual Theory

This theory holds the fact that all dividend paid are residual, after the firm has retained cash
for available investments and positive NPV projects. This being said, it was seen that
dividend being only the residual cash available cannot be a factor in the movement of share
prices. Higgins (1972, p.1527) stated that:
Starting with the basic proposition that shareholders should prefer capital gains income
to dividend income in a world of differential taxes and transactions costs, dividends are
viewed as basically a residual in the corporate decision process.

This type of dividend policy proves to be extremely volatile as the payments depends
wholly on the residual funds available. Thus, share valuation of a firm as per the dividend
policy would be irrelevant as the fluctuation of amount of distribution of income as dividend
in each financial period would not reflect the change in share price.
2.1.4 Dividend Relevance Theories:
2.1.4.1.

Bird-In-Hand Theory

This theory brings forward the relationship between dividend policy and share price, which
is, a directly proportional one that dividend increases a firms value. Litner (1962) and
Gordon (1963) argued that a bird in hand is worth two in the bush and thus when a
shareholder receives cash dividend, he is better off than one receiving capital gain. Investors
therefore value dividend more than capital gains. As a higher current dividend reduces
uncertainty about future cash flows, a high payout would reduce the cost of capital and
hence increase the share value.
However, M&M (1961) as well as Bhattacharya (1979) argued that a firms riskiness (cash
flows or returns) is not determined by the amount of dividend distributed but in fact
Bhattacharya (1979) suggested that:
a firms risk affects the level of dividend payments, but increase in dividends will not
reduce the risk of the firm.
2.1.4.2.

The Walter Model

Walter (1963) proposed a model which states that dividend policy is relevant in defining
the value of a firm. The model holds that when dividends are paid to the shareholders, they
are further reinvested by the shareholders, to get higher returns.
Walters formula to determine the market price per share (P) is as follows:
= / + ( )//
Where P Market price
D Dividend per share
E Earning per share
K Cost of equity
6

r Rate of return on investment

2.1.4.3.

Signaling Theory

According to M&Ms irrelevance theory and the perfect capital market assumptions, each
and every player on the market has the same information and for free. But in reality, agents,
that is managers or directors, who look after the management of firms for the principals
possess insider information about the present and future state of the firms, inaccessible to
the shareholders and the public. Therefore, agents would use changes in dividend as a way
to communicate information to the market about the future earnings and growth of the firm.
Ross (1977) argued that in this inefficient market, managers signal important information
to investors through dividend payments. If there is an increase in dividend payout, it signals
that there is a high retained earnings and thus share price will increase consequently.
Litner (1956) claimed that firms tend to increase dividends when managers believe that
earnings have permanently increased. It implies that the firm has a long period sustainable
earning. Managers would smooth dividends over time and not make any increase unless
they can maintain the increased amount in the future. This is known as the dividend
smoothing hypothesis.
2.1.4.4.

The Clientele Effect Theory

It was proposed by Pettit (1977) that different groups of shareholders have different
preferences for dividend. For example the shareholders or investors that earn less would
prefer to acquire high dividends so as to meet their needs while those who earn high income
would prefer less dividend so as to avoid the payment of taxes. Therefore when a firm sets
a certain dividend policy there will be a shifting of investors to it and out of it until
equilibrium position is reached, where the firms will be consistent with the clientele it has.
Allen, Bernardo and Welch (2000) suggested that clienteles such as institutional investors
tend to be more prompted to invest in dividend paying firms due to their tax advantages
over individual investors. Also, institutional investors are better positioned to acquire
information of firms compared to individual investors and by paying dividend it often give
good signal on the current and future position of the firm financial wise.

2.2

Empirical review

Gordon (1959) suggested that there were three possible hypotheses to as why investors
would buy a stock. Firstly because of the dividend and earnings, then to obtain the dividends
and finally to obtain the earnings. He examined the hypotheses using sample data from
different industries namely, chemical, food, steel and machine tools. He concluded that
dividends have greater influence on share price than retained earnings. However, it was
subjected to various criticism. Firstly he did not take into account the risk variation among
the different industries. Also, his study considered only internal financing, ignoring any
external financing that took place. Furthermore, the study was conducted on a short period
and the results could have been biased as dividends are more stable that retained earnings.
Miller and Modiglianis (1961) hypothesis on the irrelevance of dividend policy is not
compatible with empirical evidence. This fact implies that there must be additional factors
that cause firms to persistently seek a consistent policy of paying dividend.
Black and Scholes (1974) conducted an experiment to find a relationship between dividend
yield and stock returns in order to identify the effect of dividend policy on stock prices.
They constructed a portfolio of 25 common stocks listed on the New York Stock Exchange,
using the Capital Asset Pricing Model (hereafter as CAPM) to test the effect of the dividend
yield. Their results showed that the dividend yield was not significant. They concluded by
stating (1974, p.18):
We have been unable to show that differences in dividend yield lead to differences in stock
returns. This implies that we are unable to show that dividend policy affects stock prices.
Pettit (1972) observed that the announcement of dividends in fact do communicate
information to outsiders (shareholders) and the market reacts to those information. It was
noted that the market responds positively to the increase in dividend, leading to increase in
stock price. Likewise, the market reacts negatively to the announcement of a decrease in
dividend payout, leading to a decrease in stock price. He also added the following (1972,
p.1002):
dividend announcement, when forthcoming, may convey significantly more information
than the information implicit in an earnings announcement
Dividends are meant to deliver private information to the market. Predictions about the
future earnings of a firm based on dividend information should be superior to forecasts
8

made without dividend information. A number of studies have tested these implications of
the information content of dividends which includes studies by Watts (1973), Gonedes
(1978) and, Nissim and Ziv (2001).
Pettit (1977) provided empirical evidences for the existence of the Clientele Effect Theory
by examining the portfolios of 914 individual investors. He found a significant positive
relationship between the age of the investor and their portfolios dividend yield and a
negative relationship between their income and dividend yield. It was observed that the
elderly with low income earning would prefer high dividends stocks with no transaction
costs associated to it as they tend to depend more on their portfolio for financing of their
current consumption.
In the empirical examination Rozeff (1982) found three common trends in corporate
dividend policy:

Lower dividend payments levels are found in high growth firms where investment
requirements reduce the funds available for dividend payments;

Corporations with higher firm specific risks or leverage ratios pay smaller
dividends; and

Higher payouts are found in firms with little insider ownership and a large number
of outside shareholders.

Empirical studies however showed mixed evidence, using the data from US, Japan and
Singapore markets. A number of studies such as those conducted by Gordon (1959) and,
Kato and Loewenstein (1995), found that stock price has a significant positive relationship
with dividend payments. Conversely Easton and Sinclair (1989) found a negative
relationship.
Grinblatt et al. (1984) provided evidence of significantly positive announcement returns for
both stock splits and large stock dividend announcements for the American share market.
If the firm has constraints, such as legal restrictions, stock exchange rules, or bond
covenants, the bonus shares can inhibit the firms ability to pay cash dividends. Firms
expecting positive future performance will not expect these constraints to be binding, so
they do not mind reducing retained earnings. On the other hand, Firms expecting poor
performance will find these constraints binding and hence would choose not to issue more
shares.

3. OVERVIEW OF THE STOCK EXCHANGE OF MAURITIUS

A stock exchange is an exchange (market) where licenced stock brokers can buy and sell
stocks, bonds and other securities. The largest stock exchange in the world is the New York
Stock exchange with a market capitalisation of USD 19.2 trillion as per the World
Federation of Exchanges. Almost all countries in the world have their stock exchange,
including Mauritius, namely the SEM.
The SEM was incorporated in Mauritius on March 30, 1989 as a private limited company,
under the Stock Exchange Act of 1988. The Stock Exchange Act of 1988 was responsible
for the operation and promotion of an efficient and regulated securities market in Mauritius.
Since 1989, the SEM has come a long way. It first started with only 5 listed companies with
the market capitalisation of nearly USD 92 Million. Back then, trading would take place
once a week and for a mere 5 minutes period through an open outcry system. On October
6, 2008, SEM became a public company. It emerged as one of the leading exchange markets
in the African zone. Nowadays, the SEM operates two markets, namely: the Official market
and the DEM. As at 29 January 2016, the Official market has 51 companies listed with a
market capitalisation of nearly USD 5.6 billion. DEM on the other hand has 43 companies
listed with a market capitalisation of USD 1.4 billion.
The SEM has classified those companies on the Official market into several categories,
namely: Banks & Insurance and Other Finance, Commerce, Industry, Investment, Leisure
& Hotels, Property Development, Sugar and Transport. Besides the local currency MUR,
financial instruments can be traded and listed in USD, EUR, GBP and ZAR.
With the emergence of globalisation, SEM was opened to foreign investors following the
lifting of the exchange control in 1994. They do not need approval anymore to trade shares
on the SEM except for holding 15% or more in a sugar company. The foreign investors
benefits from several incentives such as free repatriation of revenue on sales, no
withholding tax on dividend and on capital gain as well. Foreign investors have become
key players on the stock exchange as about 40% of the daily trading activities are accounted
for by them.
Since December 2003, the SEM set up an active secondary market for government
instruments. The SEM has been working with the Central Bank and Commercial Banks to

10

set up a platform to trade medium and long term government securities. Commercial banks
have been licensed by the Central Bank to act as Market Makers in order to ensure liquidity.
Nowadays, the SEM is connected live to global vendors enabling the investors worldwide
to follow the market on a real time basis. This coverage of the market is a good vehicle to
carry the SEM on the world radar and enhance the Exchanges visibility internationally,
thus attracting more foreign investors interest in the Mauritian market.
Table 1: Official Markets evolution
Year
No. of listed Cos
(Equities)
SEMDEX (End of
Period)
Change in
SEMDEX (%)
Dividend Yield - %
(End of Period)

2010

2011

2012

2013

2014

2015

37

38

41

43

46

51

1,967.45

1,888.38

1,732.06

2,095.69

2,073.72

1,811.07

18.46

-4.02

-8.28

20.99

-1.05

-12.67

2.5

3.04

3.39

2.58

2.99

3.73

Source: Fact book 2016 of SEM

Evolution of Market Capitalisation of SEM

Source: Fact book 2016 of SEM

11

4. RESEARCH METHODOLOGY
Rajasekar, Philominathan and Chinnathambi (2013) believed that:
Research methodology is a systematic way to solve a problem. It is a science of studying
how research is to be carried out. Essentially, the procedures by which researchers go
about their work of describing, explaining and predicting phenomena are called research
methodology. It is also defined as the study of methods by which knowledge is gained. Its
aim is to give the work plan of research.

4.1

Research Objective

This study aims at analysing the relationship between dividend policy and its impacts on
shares market price of twenty companies listed in the SEM for the period of five years from
2010 2014 (Appendix II).

4.2

Research Hypothesis

Ho: There is no relationship between dividend and share prices

H1: There is a relationship between dividend and share prices.

4.3

Data Collection

Since it is a study of past information of the companies, secondary data shall be used.
According to Church (2001), in secondary data analysis, the individual or group that
analyses the data is not involved in the planning of the experiment or the collection of the
data. Such analysis can be done based upon information that is available in the statistical
information in the published articles, the data available in the text, tables, graphs, and
appendices of the published articles, or upon the original data. There are various advantages
to the use of secondary data as follows:

The data was already collected by someone else and thus is less time consuming;

Although some secondary data need to be bought, it is certainly cheaper than the
cost of preparing questionnaires for acquisition of primary data and also transport
costs associated to it;

Also the breadth of data available is of help to users; and

The secondary data collection is performed by researchers who have the expertise,
technique and professionalism in the associated field.
12

4.4

Model Specification

As per the work of Ali, Ali Jan and Sharif (2015), the following model would be used in
order to study to relationship between share price and dividend policy:
= 1 + 2 + 3 + 4 + + .
Where;
Y = Share Price
SDit = Coefficient of Stock dividend per share,
RRit = Retention ratio,
DPRit = Dividend payout ratio,
PATit = Profit after tax,
it = Error term in the equation.

4.5

Methods of Data Analysis

In this study, a multiple regression analysis was performed to determine the effect of
dividend policy on share price. In the model, share price was used as the dependent variable
and was regressed against three independent variables, namely, dividend payout ratio,
retention ratio and dividend per share. Since there are other factors that affect the share
price of a company, control variables were added to the regression model.

4.6

Variables Defined

4.6.1 Share Price

In this study, share price was used as the dependent variable. The share prices of the selected
companies were determined using the last closing price stated in the annual reports of the
companies for each specific year. In previous studies, Ebrahim and Amir (2009), Rashid &
Rahman (2009) and Nazir, Nawaz, Anwar, & Ahmed (2010) used share price as the
dependent variable while studying the relationship between share market price volatility
and dividend.

13

4.6.2 Dividend per share

The dividend per share can be calculated by taking the total dividends divided by the
number of outstanding shares. Its formula is as follows:
=

4.6.3 Retention Ratio

The retention ratio is the inverse of the dividend payout ratio. It can be calculated by
deducting the total dividend out of the firms earnings. It can be termed as the percentage
of income that is not distributed as dividend and retained in the firm. The next formula
shows the RR:
=

4.6.4 Dividend Payout Ratio

The dividend payout ratio can be explained as the amount of dividend distributed by a firm
out of its net income. It is believed that investors study the dividend payout ratio as a
decision making factor as it indicates if a firm is a profit making one. The investors may
see the firm as a profit distributing organization or a high growth future prospects from its
retained earnings. DPR ca be found through the following formula:
=

4.6.5 Profit After Tax

Here, the profit after tax was used as a control variable. In his study, Al-Kuwari (2010)
demonstrated how profit after tax causes the share price volatility in any given company.
The formula is given as follows:
=

14

4.7

Expected Results
Table 2: Expected results
Variables
Dividend Per Share (DPS)

Retention Ratio (RR)

Dividend Payout Ratio (DPR)

Profit After Tax (PAT)

4.8

Results

Author

Positively

Akbar and Baig

Significant

(2010)

Positively
Significant

Pani (2008)

Negatively

Allen and Rachim

Significant

(1996)

Positively
Significant

Al-Kuwari (2010)

Panel Data

The impact of dividend policy on the performances of the companies on the SEM is tested
by panel data methodology. The use of panel data methodology has certain benefits: it
combines inter-individual differences and intra-individual dynamics, allowing for:
(i)

more accurate inference on model parameters (less multicollinearity);

(ii)

constructing and testing more complicated behavioral hypotheses;

(iii)

a better treatment of endogeneity; and

(iv)

using the assumption that the companies are heterogeneous, more variability,
more informative data, more degree of freedom and more efficient (Thomas,
2007).

4.9

Time Frame

The selection of the study period was controlled mostly by the factors, such the enlistment
year in the SEM and the availability of data. This study shall concentrate only on companies
that have been enlisted on the SEM in or before 2008 so as to acquire annual reports for the
whole accounting period for the first year of study.

15

4.10

Software Used

Data was inserted in Excel spreadsheet to analyse the panel data and SPSS software was
applied to analyse the data statistically.

16

5. ANALYSIS AND DISCUSSION

This analysis chapter consists of the results of tests performed on the variables and
equations previously mentioned (Chapter 3: Research Methodology). The Pearson
correlation was used to determine the relationship between variables, the Durbin-Watson
test for serial correlation, followed by the Goodness of Fit and Regression analysis to test
the hypotheses.

5.1

Descriptive Statistics

Table 3 shows the descriptive statistics for the variable used in this study for the period
2010 till 2014. It should be noted that some companies faced losses in various financial
periods leading to negative PAT which is in fact Loss After Tax, thus explaining the
minimum value of PAT. DPR is 41.06% on average and RR 54.09% on average. The table
shows a maximum value of 200% for DPR, this indicates that the company has paid out
more in dividend than it had made in net income. This negative minimum DPR value on
the other hand stipulates that the company has made a dividend payment even is the latter
has made a loss.
Table 3: Descriptive analysis

Minimum

5.2

Maximum

Mean

Std.
Deviation

DPS

12

2.637

2.7922

RR

0.5409

0.30891

DPR

-0.6696

0.4106

0.37989

PAT

-163,027,000

4,517,000,000

457,732,149

940,459,516

Pearson product-moment correlation coefficient

Table 4 shows the Pearson Correlation coefficients in order to measure the degree of linear
dependence between each variable, values ranging from -1 to +1.

17

Table 4: Pearson Correlation

SP
SP

5.3

DPS

RR

DPR

PAT

DPS

0.88

RR

0.199

-0.001

DPR

-0.136

0.07

-0.568

PAT

0.313

0.297

0.227

-0.1

Share price and independent variables

Table 5: Share price coefficient
Share price
Pearson

Variables

Correlation
DPS

0.88

RR

0.199

DPR

-0.136

PAT

0.313

The above table shows the correlation coefficient between the dependent variable Share
Price with each independent variables. SP has a very strong positive relationship with DPS,
while SP has a very weak, to almost negligent negative relationship with DPR. On the other
hand, there is a weak and moderate positive correlation with RR and PAT respectively.

18

5.4

Auto Correlation: Durbin-Watson

Table 6: Durbin-Watson
Durbin-Watson
Model 1

1.496

Table 6 shows the auto-correlation status of the Model. Values of Durbin-Watson closer to
2 indicates no serial correlation, values less than 2 indicates a positive serial correlation and
values more than 2 shows a negative serial correlation. The figures obtained for Model 1
indicates positive correlation.

5.5

Regression Analysis

A multiple regression has been computed in order to test the hypothesis drawn in the
Methodology chapter. The significance and coefficient values are tabulated below:
Table 7: Regression analysis
Unstandardized

Standardized

Coefficients

Coefficients

Std. Error

Constant

10.867

12.28

DPS

25.691

1.366

RR

0.339

DPR
PAT

Sig.
t

P
Value

Beta
0.885

0.379

0.886

18.804

0.000*

0.15

0.126

2.268

0.026*

-0.271

0.118

-0.125

-2.293

0.024*

7.33E-10

0.000

0.009

0.178

0.859

a. Dependent variable: Share price

Level of significance at 5% is marked with *.

19

Table 8: ANOVA
F
Regression

Sig.
0.000b

102.951

a. Dependent Variable: SP
b. Predictors: (Constant), PAT, DPR, DPS,
RR
Table 7 above indicates that DPS, RR and DPR all have much worth mentioned relationship
with the share price, having p-value 0.000, 0.026 and 0.024 respectively which are less than
5% and thus are significant. This means that as the value of the three independent variable
fluctuate, the dependent variable, share price, will fluctuate accordingly. PAT on the other
hand is a control variable placed in the model and shows a negative relationship with the
share price. The F-Value defines the statistical significance of the overall model. If F-value
is greater than 4 then the overall model is statistically significant as shown in Table 8.
Further to the results of P-value, t-statistic, F and R2, H1 is therefore accepted.
Table 9: Goodness for fit

Model
1

R2

0.908a

0.824

a. Predictors: (Constant), PAT, DPR, DPS, RR

Table 9 above indicates that R2 shows that almost 82.40% change in dependent variable is
because of change in independent variables.
5.5.1

Dividend Per Share and Share Price

DPS is the sum of declared dividends for every ordinary share issued. Results from Table
6 witnessed that DPS shows a significant relationship towards share prices. The P Value
shows the level of significance, which is 0.000. This is also supported by the t-statistic
which is more than +2. Many researchers like Akbar and Baig (2010) found the positive
relation between them. Further to this study, it proves that dividends means more earnings
to investors and this will increase the demand for purchase of the companys share on the
market causing it to face an increase in price.

20

5.5.2

Retention Ratio and Share Price

Looking at the results from Table 7, it is clear that RR has a worth mentioning association
with the share price. Its significance level is 0.026 which is less than 5% and thus indicates
a positive relationship with share price. This is confirmed by the t-statistic which is slightly
greater than +2. This positive relationship found between RR and share price may indicate
that investors considered the fact that management was retaining more of the earning in the
company for re investment purposes which would lead to more profits and probably higher
dividend payments in the future. Pani (2008), in their study, established a positive
relationship between retention ratio and stock prices. Auther and Kawal (2011) on the other
hand, there was a negative association between the two. Reasoning for this negative
relationship could be that, investors prefer that the firm pay them dividend than retaining
the profit in the firm for internal needs.
5.5.3

Dividend Payout Ratio and Share Price

DPR has a positive significant relation to share prices. This means that an increase in DPR
will definitely cause an increase in share price and vice versa. P-value showed the level of
significance which is 0.024. Given that DPR indicates the percentage of earnings made by
the company that is paid out as dividend, an increase in same is an indication to the
shareholders and future investors that the company is probably being highly profitable and
would be paying high dividends on a regular basis. This could cause an increase in demand
for purchase of shares of the company and results in an increase of its share price. Similarly,
Nishat and Irfan (2003) obtained a direct relationship between share prices and DPR. In
contrast, Allen and Rachim (1996), Rashid and Rahman (2009) and Nazir et al., (2010)
found negative relationships.
5.5.4

Profit After Tax and Share Price

In this study PAT was used as a control variable. It has an immaterial relation with share
price. Table 7 above, shows that PAT has a negative relationship with share price. This
relationship is indicated by the p value of 0.859 and t-statistic value of 0.178, which is less
than +2. In the case of Auther and Kanwal (2011), PAT was used as a control variable and
there was a positive association between the two. In the studies of Pani (2008) and AlKuwari (2010), PAT was used as the independent variable and it formed a positive
relationship with share price. In other words, investors consider an increase in PAT as the
companys growth and better future dividend payout.
21

6. CONCLUSION AND RECOMMENDATIONS

6.1

Conclusion

The purpose of this study was to analyse the impact of dividend policy on share prices of
companies on the stock exchange of Mauritius. Results from the analysis show that the
independent variables have statistically significant relationships with share price. As
established in this paper, shareholders have a preference for dividend income rather than
capital gain. Therefore, shareholders would feel rather uneasy if the companies they invest
in have a low DPR and keep their earnings for future investments. Further to this analysis,
H1 is therefore accepted.
However, it is not advisable for companies to have 100% DPR as it might affect the
economic condition of the companies and could lead to a lack of fund. Also, a company
paying out 100% of its earnings could be a sign that the management lacks innovation and
investment skills and thus on a long term prospect investing in the latter is not prudent. Data
acquired showed that investors should be cautious about investing in companies in the hotel
sector as these companies tend to run on huge losses in certain period and then do not pay
dividend for a few years
Therefore, it is important for companies to decide on an optimal dividend policy that would
suit the need of both the company and its shareholders. This decision should not be one to
be taken solely by the board of directors but also the opinion of the shareholders should be
taken into consideration. Further to that, decisions on the dividend policy would help in the
development and growth of the company.

6.2

Recommendations

Further to the above study and results, it is recommended that:

1) For further studies of dividend effect on share price, other researchers could use a
bigger sample size and increase the time frame;
2) The panel data in this study could omit companies that face losses in certain period;
3) For further studies, share price could be tested against more independent variables
such as Earnings per share, Dividend yield and Return on Equity;
4) In addition to the method of statistical analysis used to test share price, Spearman
coefficient could also be used for further studies; and

22

5) Companies should constantly provide information on their activities and

performances for shareholder and future investors so that they can analyse the
companies situation and decide on their investment opportunities.

23

7. LIST OF REFERENCES
Journal:
AKBAR, M., & BAIG, H. H. 2010. Reaction of Stock Prices to Dividend Announcements
and Market Efficiency in Pakistan. The Lahore Journal of Economics, 15 (1), 103-125.

AL- GHARAIBEH, M., ZURIGAT Z., & AL-HARAHSHEH K. 2013. The Effect of
Ownership Structure on Dividends Policy in Jordanian Companies. Irbid-Jordan: Yarmouk
University

AL-KUWARI, D. 2010. To Pay or Not to Pay: Using Emerging Panel Data to Identify
Factors Influencing Corporate Dividend Payout Decisions. International Research Journal
of Finance and Economics. Vol. 42, 19-36.

AL-MALKAWI, H., RAFFERTY, M. & PILLAI, R. 2010. Dividend Policy: A Review of

Theories and Empirical Evidence. International Bulletin of Business Administration. Issue
9. 171-200.

ALI, A., ALI JAN, F & SHARIF, I. 2015. Effect of dividend policy on stock prices.
Business & Management Studies: An International Journal, Vol.:3 (1). 56-87

ALLEN, D. E. and RACHIM, V. S. 1996. Dividend Policy and Stock Price Volatility:
Australian Evidence. Applied Financial Economics. 6 (2):175-188

ALLEN, F., BERNARDO, A. E., & WELCH, I. 2000. A Theory of Dividends Based on
Tax Clienteles, Journal of Finance Vol 55, 2499-2536

BHATTACHARYA, S., 1979. Imperfect Information, Dividend Policy, and "the Bird in
the Hand" Fallacy, Bell Journal of Economics Vol 10, 259-270

BLACK, F., 1976. The Dividend Puzzle, The Journal of Portfolio Management, 634-639

CHURCH, R. M. 2001. The effective use of secondary data. Brown University. Learning
and motivation. Vol 33. 32-45
24

DIAMOND, J.J., 1967, Earnings distribution and the evaluation of shares: Some recent
evidence, Journal of Financial and Quantitative Analysis 2, 14-29

EASTON S. A. & SINCLAIR N. A., 1989. The Impact of Unexpected Earnings and
Dividends on Abnormal Returns To Equity, Journal of Accounting & Finance, Vol 29 (1),
119
FAMA, E. F., & FRENCH, K. R. 2002. Testing Trade-Off and Pecking Order Predictions
about Dividends and Debt. The Review of Financial Studies, Vol. 15 (1), 1-33.

FISCHER, B. & SCHOLES, M. 1974. The Effects of Dividend Yield and Dividend Policy
on Common Stock Prices and Returns. Journal of Financial Economics. 1. 1-22

GRAHAM, B. & DODD, D. L. 1934, Security Analysis. US: Whittlesey House, McGrawHill Book Co.

GRAHAM, B. & DODD, D. L. 1951, Security Analysis. US: Whittlesey House, McGrawHill Book Co.

GONEDES, N. J. 1978. Corporate signaling, external accounting, and capital market

equilibrium: Evidence on dividends, income, and extraordinary items. Journal of
Accounting Research 16 (spring): 26-79.

GORDON, M. J., 1963. Optimal investment and financial policy, Journal of Finance, 264
272

GORDON M. J., 1995. Dividends, Earnings, and Stock Prices, The Review of Economics
and Statistics, Vol. 41(2). 99-105

GRINBLATT, M., MASULIS R., and TITMAN, 1984. The valuation of stock splits and
stock dividends, Journal of Financial Economics 13, 461-490

GROSSMAN S. J. and STIGLITZ J.E. 1980. On the Impossibility of Informationally

Efficient Market. The American Economic Review. Vol 70 (3). 393-408
25

GRULLON, G.; MICHAELY, R.; and SWAMINATHAN, B. 2002. Are dividend changes
a sign of firm maturity? Journal of Business 75 (July): 387-424.

HASHEMIJOO, M., ARDEKANI, M., AREF & NEJAT, Y. 2012. The Impact of Dividend
Policy on Share Price Volatility in the Malaysian Stock Market (2012). Journal of Business
Studies Quarterly, Vol. 4 (1)

HIGGINS, 1995. Dividend changes and future profitability, The Journal of Finance, Vol.
56 (6), 2111-33.

KATO, K. and LOEWENSTEIN, U. 1995. The Ex-Dividend-Day Behavior of Stock

Prices: The Case of Japan, The Review of Financial Studies 8, 817-847.

LINTNER J., 1962. Dividends, earning, leverage, stock price, and the supply of capital to
corporations, Review of Economics and Statistics, Vol 44. 243 269

MICHAELY, R., THALER R. H. and WOMACK K. L., 1995. Price Reactions to Dividend
Initiations and Omissions: Overreaction or Drift? Journal of Finance 50, 573-608.

MILLER, M. H., and MODIGLIANI, F. 1959. 'The Cost of Capital, Corporation Finance
and the Theory of Investment, Reply, American Economic Review, XLIX (September),
655-69

MILLER, M. H., and MODIGLIANI, F. 1961. Dividend policy, growth, and the valuation
of Shares. Journal of Business 34 (October): 411-433.

MILLER, M. H., and ROCK, K., 1985. Dividend Policy under Asymmetric Information.
Journal of Finance. Vol XL (4) 1031-1050

NAZIR, et al., 2010. Determinants of Stock Price Volatility in Karachi Stock Exchange:
The Mediating Role of Corporate Dividend Policy. International Research Journal of
Finance and Economics (55): 100-107.

26

NISHAT, M., & IRFAN, C. M. 2003. Dividend Policy and Stock Price Volatility in
Pakistan. 11th Pacific Basin Finance, Economics and Accounting Conference.

NISSIM, D., and ZIV, A. 2001. Dividend changes and future profitability. Journal of
Finance 56. 2111-2133.

OGDEN, J. P. 1994. A dividend payment effect in stock returns, The Financial Review,
Vol. 29 (3). 345-69

OHLSON, J. A. 1995. Earnings, Book Values, and Dividends in Equity Valuation.

Contemporary Accounting Research Vol 11: 661-687

PANI, U. 2008. Dividend Policy and Stock Price Behaviour in Indian Corporate Sector: A
panel data approach. Retrieved from Indian Institute of Technology. [Online] Available at
http://ssrn.com/abstract=1216171 [Accessed on 10 March 2016]

PETTIT, R. R., 1972. Dividend Announcements, Security Performance, and Capital Market
Efficiency, Journal of Finance. Vol 27, 993-1007

PETTIT, R. R., 1977, Taxes, Transactions costs and the Clientele Effect of Dividends,
Journal of Financial Economics Vol 5, 419-436

RASHID, A., and RAHMAN, A.Z.M.A. 2009. Dividend Policy and Stock Price Volatility:
Evidence from Bangladesh. Journal of Applied Business and Economics. 71-81.

RAJASEKAR, S., PHILOMINATHAN, P. & CHINNATHAMBI, V. 2013. Research

Methodology. School of Physics, Bharathidasan University

ROBERT A. D. and ASNESS C. S. 2003. Surprise! Higher Dividends equal Higher

Earnings Growth. Financial Analysts Journal.

ROSS S. A., 1977. The Determination of Financial Structure: The Incentive-Signalling

Approach, The Bell Journal of Economics, Vol. 8 (1). 23-40

27

ROZEFF, M. S., 1982, Growth, beta and agency costs as determinants of dividend payout
ratios, Journal of Financial Research, Vol 5 (3), 249-259

WALKER, C. E., 1931. The History of the Joint Stock Company. The Accounting Review.
Vol 6, 97-105

WATTS, R. 1973. The information content of dividends. Journal of Business. Vol 46 .191211.

Websites:

Hsiao, C, 2007. Panel Data Analysis - Advantages and Challenges. HKUST, [Online]. Vol
16, 1-22. Available at: http://www.ust.hk/ [Accessed 12 March 2016]

STOCK EXCHANGE OF MAURITIUS. 2016. Listed issuers on Official Market, [Online].

Available at: http://www.stockexchangeofmauritius.com/officialmarket-listedcompanies
[Accessed 10 March 2016]

DIVIDEND.COM,

2016.

Top

10

Dividend

Quotes,

[Online].

Available

at

http://www.dividend.com/blog/?p=51517 [Accessed 10 March 2016]

TRADING ECONOMICS. 2016. Mauritius Stock Market (SEMDEX) [Online]. Available

at http://www.tradingeconomics.com/mauritius/stock-market [Accessed 10 April 2016]

28

8. APPENDICES
Appendix I
Statistical Tables

Descriptive Statistics
N

Minimum

Maximum

Mean

Std.
Deviation

DPS

100

.0

12.0

2.637

2.7922

RR

97

0.00%

100.00%

54.0864%

30.89184%

DPR

97

-66.96%

200.00%

41.0604%

37.98889%

PAT

99

4517000000.

457732149.4

940459516.8

163027000.0

34

522

Valid N (listwise)

96

Correlations
SP
SP

Pearson Correlation

RR

DPR

PAT

1.000

.880

.199

-.136

.313

DPS

.880

1.000

-.001

.070

.297

RR

.199

-.001

1.000

-.568

.227

DPR

-.136

.070

-.568

1.000

-.100

PAT

.313

.297

.227

-.100

1.000

.000

.028

.097

.001

DPS

.000

.498

.253

.002

RR

.028

.498

.000

.014

DPR

.097

.253

.000

.169

PAT

.001

.002

.014

.169

SP

93

93

93

93

93

DPS

93

93

93

93

93

RR

93

93

93

93

93

DPR

93

93

93

93

93

PAT

93

93

93

93

93

SP

Sig. (1-tailed)

DPS

29

Model Summaryb
Model

Adjusted R

Std. Error of

Durbin-

Square

Square

the Estimate

Watson

.908a

.824

.816

35.3875

1.496

a. Predictors: (Constant), PAT, DPR, DPS, RR

b. Dependent Variable: SP
ANOVAa
Model

Sum of

df

Mean Square

Sig.

Squares

Regression

515692.581

128923.145

Residual

110199.954

88

1252.272

Total

625892.536

92

.000b

102.951

a. Dependent Variable: SP
b. Predictors: (Constant), PAT, DPR, DPS, RR
Coefficientsa
Model

Unstandardized

Standardize

Coefficients

Sig.

Collinearity
Statistics

Coefficients
B

Std.

Beta

Toleranc

Error

Constant

10.867

12.280

DPS

25.691

1.366

.339
-.271

RR
DPR
PAT

7.329E010

VIF

e
.885

.379

.886

18.804

.000

.901

1.109

.150

.126

2.268

.026

.647

1.545

.118

-.125

-2.293

.024

.672

1.488

.000

.009

.178

.859

.860

1.163

a. Dependent Variable: SP

30

Appendix II
List of Companies in sample:
1. Automatic System Ltd
2. Caudant Development Limited
3. Compagnie des Magasins Populaires Ltee
4. ENL Commercial Limited
5. ENL Land Ltd
6. Harrel Mallac Ltd
7. Ireland Blyth Ltd
8. Innodis Ltd
9. Lux Island Resorts Ltd
10. Mauritian Eagle Insurance Co. Ltd
11. Mauritius Union Assurance Co. Ltd
12. MCB Group Limited
13. National Investment Trust Ltd
14. Omnicane Ltd
15. P. O. L. I. C. Y Ltd
16. Rogers & Co Ltd
17. Sun Limited
18. Swan General Ltd (formerly Swan Insurance Company Ltd)
19. Terra Mauricia Ltd
20. The United Basalt Products Ltd

31

Appendix III

UNIVERSITY OF MAURITIUS
CENTRE FOR INNOVATIVE AND LIFELONG LEARNERS
PROGRESS LOG
Student Name: PAYANIANDY Muruganandam
Student ID: 1217700
Department: CILL
Programme: BSc (Hons) Financial Management
Title of Dissertation: The impact of dividend policy on share value of companies listed on
the Stock Exchange of Mauritius
Supervisor: Mrs Reena Bhattu Babajee
Project Coordinator: Dr. Boopen Seetanah

Your Progress Log serves as a record of your transferable skills and participation and
attainment as a student for dissertation purposes.

Its purpose is to help you to plan your own dissertation and to record the outcomes.

As well as gaining valuable skills, you will find that the information accumulated in
this Log will prove helpful during the write up of the dissertation.

The document belongs to you and it is your responsibility to keep it up to date.

It is your responsibility to ensure your supervisor is aware of the dissertation activities

you have undertaken.

You should sign the appropriate statement below when you submit your Progress
Log:
I confirm that the information I have given in this Log is a true and accurate record:

Signed: Date: ..
32

RECORD OF STRATEGIC MEETING WITH SUPERVISOR

Meetings

Date

12/02/16

Topics/Themes
Discussed
Review synopsis
and discussed
structure of mini
project
Literature Review
and approach to
prepare
methodology
Discussion on
methodology
adopted and steps
to be taken next

02/03/16

21/03/16

30/03/16

Data analysis

18/04/16

Feedback on draft

Comments (If
any)

Supervisors
Initials

Students
Initials

To do
research on
model for
regression

Supervisor: ...... Signature: ... Date: ..

N.B.: Both the supervisor and the student should retain a copy of this Progress Log. A copy of
the duly filled and signed Progress Log should be included and submitted in the section
Appendices of the Dissertation.

33