The Important of Semantics Knowledge in Teaching English

mother tongue piece surmisal and the analysis of conversations. Sequencing and edition in pragmatic possibleness Jacques Moeschler De give wayment of Linguistics University of Geneva 1. Introduction Conversation has recently make a focus of interest for terminology get along surmise and several(prenominal) proposals have been formulated concerning the possible extension of wrangle act scheme to the analysis of conversation. This debate (cf. Searle et al. 1992) has to be interpreted as a oxidizable kick the bucket rather than as a natural extension of the man of speech act scheme.Nevertheless, this reaction, either sceptical (cf. Searle 1992) or optimistic (cf. Dascal 1992, Vanderveken 1992 and 1994), has brought provoke issues which contrast with the various attempts by linguists at extending speech act guess to the domain of plow1 . The startle purpose of this paper is to explicit the divergence amidst philosophers and linguists about the possible extension of sp eech act theory to handling analysis. This paper has a nonher purpose it as well deals with the possible domain of pragmatic theory with respect to dialogue analysis.I shall argue that the main purpose of talk about analysis is the definition of necessary and capable 2 MOESCHLER conditions for sequencing and interpretating utterances in discourse. I claim that these cardinal aspects of discourse (sequencing and interpretation) argon intrinsically related and can non be accounted for independently from each other. I claim furtherto a greater extent that speech act theory cannot give any insight into the sequencing and interpretation problems, because speech act theory is neither a theory of interpretation (it is a theory of meaning) nor a globular theory of action.Finally I show how a rootage pragmatic theory (in the Gricean sense) accounts for the sequencing and interpretation problems. 2 2. Speech act theory and conversation There is a common sense argument sh atomic numb er 18 by philosophers and linguists in favour of the possible extension of speech act theory to discourse analysis. This argument is the following Speech acts be not isolated moves in conversation they appear in more global units of communication, outlined as conversations or discourses.Vanderveken (1994, 53) gives an explicit version of this thesis when maintain that speakers perform their illocutionary acts within entire conversations where they are most often in verbal interaction with other speakers who reply to them and perform in shimmer their witness speech acts with the same collective intention to pursue with supremacy a certain typesetters case of discourse. Thus, above all, the use of language is a social form of linguistic behavior.It consists, in general, of ordered sequences of utterances do by several speakers who tend by their verbal interactions to achieve common straggling goals such as discussing a question, deciding together how to react to a certain s ituation, negociating, consulting or more simply to supervene upon greetings and talk for its own sake. For terminological convenience, I will call such ordered sequences of speech acts conversations. SPEECH ACTS AND CONVERSATION 3 The basis of this argument is that conversation is made of sequences of speech acts.This certainly is a plausible theoretical claim3 , but gives cut to a certain number of objections, raised mainly by Searle (1992) in his skeptical argument. These objections concern essentially the possible relations amid questions and answers in conversation, and can be stated as follows. First of all, questions are defined in speech acts theory as invites for information, and as such reduce representative acts as replies. But this cannot be correct, since a reply whitethorn have other illocutionary point (as a promise) if the question is a request for a promise.Secondly, certain questions require a directive as a reply, and not a representative, when the question contains a modal auxiliary verb (cf. the change Shall I marry Sally ? Yes, do/ No, dont / *Yes, you shall / *No, you shall not). The third counter-example is given by indirect reponses, which do not suffer syntactic conditions, although the answer is pragmatically appropriate. To these three arguments, we could add an even more embarrassing one answer is not a specific illocutionary force, which could be analysed by the seven components of illocutionary force (cf.Searle &038 Vanderveken 1985). Answer is a useable excursive qualification, but certainly not the semantic definition of a speech act type. These objections make explicit an important difference between the organize of illocutionary acts and the structure of conversation. In speech act theory, and more precisely in illocutionary logic, illocutionary force is de placid into seven components, which are all necessary conditions for the successful and non spoiled accomplishment of illocutionary acts.These components (cf. Searle &038 Vanderveken 1985, 12-20) are the illocutionary point, the degree of strength of the illocutionary point, the mode of achievement of the illocutionary point, the propositional center conditions of the illocutionary act, the preparatory conditions of the illocutionary act, the sincerity conditions of the illocutionary act, and finally the degree of strength of the sincerity conditions. That predictions 4 MOESCHLER bout the sequencing in conversation are difficult to come by follows from the fact that the internal structure of illocutionary acts (and more specifically the set of conditions for success) cannot learn the set of possible replies for any type of illocutionary act. By contrast, discourse analysis, maculation specifying sequential relations in discourse between speech acts, does not constrain sequencing in conversation depending on the set of possible components of illocutionary force. The constraints are not structural, in the sense of speech act theory, they are on the contrary useable.This means that the basic structures of conversation (exchanges) are made of land order conversational units (moves) which carry serviceable properties. If speech act theory has been used so extensively within this paradigm of discourse analysis4 , it is because the structural properties associated with speech acts as units of meaning have been exported to speech acts as units of communication and discourse. This has several subjects for the description of speech acts within discourse analysis. The first consequence is that the structure of conversation is not only based on a hierarchy of constituency, but is also functional.To take a classical discourse model (cf. Sinclair &038 Coulthard 1975), discourse categories (exchange, move, and act) are defined functionally. For typesetters case, an act of ELICITATION is part of a move of ELICITATION, which governs an exchange of ELICITATION. Thus all discourse constituents begin a communicative func tion, that is, an interactive meaning. But we are here far-off from the conventional and semantic-meaning defining speech acts in speech act theory5 . As we have just noticed, discourse analysis supposes principles of constituency which allow interpretive or functional inheritance.If we study, as above, that an ELICITATION is a two-place predicate relating utterance-units and discourse-units, we must(prenominal) assume too that the functional properties of the smallest discourse units (acts) are inherited by the large constituents (moves and exchanges). This principle is structurally identical to the projection principle in rich grammar a phrase is a maximal projection of a lexical head (for SPEECH ACTS AND CONVERSATION 5 instance NP is a maximal projection of a N) in discourse, then, an exchange is thus functionally a maximal projection of an act.The principle of functional projection is not a necessary consequence of discourse analysis. Another classical discourse model, the Geneva hierachicalfunctional model (cf. Roulet et al. 1985, Moeschler 1985, Moeschler 1989a) makes a different claim functional value do not stand in a one-to-one kindred with discourse structures. In this model, there is a basic difference between rules of discourse formation and principles of functional interpretation. The structural dimension is based on the following rules of formation R1 Units of type Exchange are made of units of type bleed.R1 Exchanges are composed of at least two Moves. R2 Units of type Move are made of units types Act, Move or Exchange. R2 Moves composed by a oneness Act are well-formed. R2Moves composed by an Act and another discourse-unit type (Move or Exchange) are well-formed. R2 Moves composed by a single Exchange are ill-formed. Thus, the following discourse structures are well-formed (1) a. b. c. > where E = exchange, M = move, A = act The structures in (1a-c) are the hierarchical representations interchangeable to the following short excha nges in (2)-(4) (2) A B A B A Are you fructify ?We can vanish. Are you ready ? wherefore ? We must offer now. (3) 6 B (4) A B A B A MOESCHLER Okay, but when I am in a hurry, I always forget something. Are you ready ? Because we must leave now. Yes I am Good. Lets go Lets go Okay We can represent the bracketting structures given in (1) by the following tree-schemata (5) (a) E M2 A We can leave. M1 A Are you ready ? (b) E E M2 M M1 M1 M2 M M1 A A A A A A A A A A A A A Are you ready ? Why ? We must leave now. Okay, but when I am in a hurry, I always forget something. (c) M1 E M2 M3 E M2 M3Are you ready ? Because we must leave now. Yes I am Good Lets go Lets go Okay These structures mean that in (5a) the exchange is made of two moves twain composed of a single act, in (5b) the exchange is composed of two moves, the second of which is made of an exchange with two moves, and a move composed by an act and a move, and in (5c) the three-move exchange contains in the first move an excha nge made of three moves. SPEECH ACTS AND CONVERSATION 7 What are the functional counterparts of the structural aspects of conversational discourse ?There are two dimensions of functional properties associated with the structural device the first dimension is a restricted inheritance principle, and the second, a general procedure for assigning interpretation to discourse constituents. The first principle is a principle of functional constitution Principle of functional composition (i) Constituents of exchanges bear illocutionary functions. (ii) Constituents of moves bear interactive functions. Definitions (i) Illocutionary functions are of three types initiative, reactive, and reactive-initiative. (ii) Interactive functions are of two types directive, and subsidiary company.The first move of an exchange (M1) is always initiative the final move of an exchange is always reactive. For instance M2 in the exchange is the reactive move, and M1 is the initiative move. An inserted move (for example M2 in the structure ) is a reactive-initiative move. A directive (D) constituent is of the type move or act, and contains the act from which the move receives its illocutionary function a subordinate (constituent (of put act, move or exchange) is cancellable, and generally completes, argues for, or justifies the main or directive constituent of the move. We can now ive the complete hierachical-functional structures given in (1) and (5) as (6) and (6) (6) a. b. c. 8 MOESCHLER where E = exchange, sE = subordinate exchange, M = move, sM = subordinate move, dM = directive move, sA = subordinate act, dA = directive act (6) (a) E M2 dA We can leave. M1 dA Are you ready ? (b) E M2 dM sE M1 M1 M 2 dM dA dA dA sA sA dA dA sA dA dA dA dA dA Are you ready ? Why ? We must leave now. Okay, but when I am in a hurry, I always forget something. (c) M1 E M2 M3 sE M1 M2 M3 Are you ready ? Because we must leave now. Yes I am Good Lets go Lets go OkayThe second functional counterpart of the stuctural device is a procedure of interpretation assignment. It is not sufficient to have functional values assigned to discourse constituents required is also to have a procedure governing the assignment of a functional interpretation to each constituent. In other words, the types of structures given in (1), (5) or (6) are syntactic representations of discourse we need in addition a semantics, which can for instance assign to the hierarchical-functional structures given in (6) the following functional interpretations SPEECH ACTS AND CONVERSATION 9 (7) a. b.

Being an Insider

In my commencement paper, I wrote about being an out f arr. It was hard for me to come to America, not talk English as my first language, and attending a private Christian school where I did not always understand historic things. Now, I would desire to describe a period when I was no long-run an outsider, besides if actu entirelyy an insider.When I first came to the U. S. , I was not real when I would ever feel the similars of I belonged. It wasnt that I disliked my new home, it was that I could not understand what was being verbalize near me. As I state in my previous paper, it was real difficult and I however hoped that summer camp would be a diametrical experience for me.The first day of summer camp, I ring being quite nervous. Not only was I exit to a new place, only when I was leaving the friends that I had do in high-school for a summer. When I had struggled so some(prenominal) to fit in, it was hard to for absorb orthogonal place that had become familiar only to come to other foreign place summer camp. Part of me thought it might be like high school. Maybe I would be the only foreign adept there and maybe I would fall in way trouble arrest what people were saying. Maybe it would be hard for me to connect with people. I did not hit the sack what to expect. The first day that I was in nearly sustain all of my fears.The couselor spoke quick English. I groaned inwardly to myself, because I could involve my high-school experience happening all over again. I was not original how I would survive an entire summer of summer camp if it was the self comparable(prenominal) as high-school. I went throughout my first day floating from natural process to activity, still un undisputable if this was deviation to work out for me. I mazed my family and my friends from home so much that it hurt. Never in my dreams, could I comport known that nearly everyone else there was missing his or her family and friends, just like I was. They, howe ver, had the advantage of speaking fluent English.It was when I was walking plump for to my bunk at the end of my last activity that roughthing amazing happened for me. Tossing a minuscule pebble in front of me, I was not paying solicitude to what was going on around me. I tossed the pebble up, hit it with my knee and because kicked it out and hit a nearby tree diagram. One squirrel came scampering out of the tree as though I had been aiming the pebble at him. Wow. That was pretty good be you as good with a clustering? This guy with crazy pig asked me. I just stargond at him. I understood what he was asking, but I was just surprised that he was talking to me.I contend hoops at home, I utter. It was something that my family crawl ind to do together. You should count for one of our camp field goalball teams, he said. Me? I asked. I still just could not believe what was happening. Basketball was something that I definitely knew something about. On fall out of that, I c ould make new friends. It was perfect He told me where they were meeting and the time. I was so excited that I went tush to the bunk and searched for my good sneakers. I called home and told my family what had happened to me that day. I definitely sounded chipper than I had when they dropped me off at the camp.The next day, when I walked to the basketball court, I was a little sc ar by how good these people were. Guys and girls alike were handling the basketball ball like they were Michael Jordan. I ran over and began playing with them. They did not make a big deal about my being there. With basketball, it does not matter who you are or where you are from. In basketball, it matters how you play the crippled. One thing I was self-confident with was that I could play basketball and play it closely. A basketball had been in my hands since I could remember. That is just how it was in my family.While fishing is something that some American families bond over, basketball is what my family bonded over. Hey, waved Juan, the guy with the wild hair that I had seen yesterday. You know something? You are good It did not take long for me to check off that he was the team captain. He was authentically good and had commodious ideas. I smiled and shrugged. It was nice to be told that by somebody who was probably just as good. Throughout the remainder of the game, I kept getting pats on the back and cheers from people I did not know who were sitting on the side of the court. It really felt good to finally fit in with people.You play basketball at home, yes? asked this girl who had a thick accent. I was no longer the foreign kid. I was among m any(prenominal) different kinds of people who enjoyed the same game as I did. We continued to play basketball at once or twice a week for official practice onwards we were going to compete with another camp team. We joked about practicing those two days, but in reality, we always ended up gravitating towards the basketball c ourt when we did not have to practice. When we were not playing basketball, we were all going over to persons cabin and watched a game. It was just in our blood.It was like a hunger that could not be met. During my activities, I thought about my teammates. I drew basketballs all over my notebook for my activities and thought about different moves that I should try during the next practice. Juan was okay with teammates coming up with ideas. He was not a captain who had to have all of the power. That make us all prise him more. Just kno go ong that I had a coarse new group of friends who all enjoyed a sport that I love made school that much easier and bearable. I was also beginning to gain more English by being around them. Especially their slang.Phrases like that is wiggin me out, and for real, slipped out of my mouth as naturally as if I had heavy(p) up saying them. The more we played basketball, the more they ac companionshipd my skill. I did not understand all of the rules in English, but the other teammates took the time to explain a lot to me and we also had access to the camps com droper lounge so that we could research basketball online. Once I researched the rules, I found a lot of online information about basketball that I thought might help me perfect my skill. Juan and the other teammates would privation me at my best for our upcoming competition against another intramural team.It was going to be my first time competing with people that were not family members since I had been in the states. When I told my teammates about the research I was doing, they were very enthusiastic. We huddled around one computer, researching things from different plays to the history of basketball. It was amazing that we were researching something not because we had to do it for a class, but because we actually precious to simply to gain more knowledge on the subject. Some of the terms were hard to learn, but websites like www. basketball. com/nba/rules/rule4. shtml, helped me understand.To dribble, is to jounce the ball with one hand without letting it stop bouncing from that spot on the floor. A block is when one pseud makes illegal personalised contact with another player on the opposite team and interferes with the players move. A free throw is when one player from a team is allowed to make an attempt at a basket without any interference with players on the opposing team. The player must act indoors ten seconds. There are many more terms that I in condition(p) while researching that really made me understand how to communicate with my teammates, or understand when they were communicating something to me.We learned a lot about our game that day that we thought would help us that much more earn the basket on the game day. We kept practicing until the game that we had done so much preparation for was only a week away. We could not win it without you, said Juan to me. I could not help but grin. These people were really my friends. Home, t hough it still seemed far away, was not as present in my mind as it had been before. It was at the practice before the game that I thought my whole new experience was going to be ruined. We were practicing, like always. It had just rained earlier that morning, but the pavement was still a little damp.We did not fate to cancel the practice, because we wanted to get in as much practice as possible. I had the ball and was so constrictive to the basket. Leo was next to me, getting closer and closer. As he put his foot out to get the ball, my sneaker slipped and made me fall awkwardly onto the court. When I fell to the ground, I heard a pop. It was my ankle and I knew it. After I went to the camp clinic, I was relieved that it was only bad sprained and not broken. I was heartbroken, however, that I could not play at the game. You know what, come to the game, anyway. If we cant have you on the court, we can current use your support, said Juan.The team was disappointed, though. I felt like I had let them down, but they did not see it that way. They said that in my practicing with them and researching with them, they learned a lot about the sport that they love so much and that what they learned could actually help them have an advantage over their opponents. They said I was still going to be the reason that they were going to win. That made me feel much better and it assured me that I was still going to be an insider. They were not going to turn their backs on me just because of my injury. Later, I asked Juan if he thought anyone would blame me if the team did not win.He told me that if I wanted to, I could blame Leo. I was surprised he said that. Blaming does not help anything. It wont heal your ankle and it wont make us win the game. Stuff just happens. We definitely want you to play as soon as that ankle heals. I would brass forward to putting my basketball sneakers on again. Until then, I knew I had to be content in just cheering for my friends. The game da y came and I sat on the bleachers with my ankle tightly wrapped and propped up high. I have to admit that I was disappointed and a little grabby when my friends dribbled the orange ball around on the court.I felt bad, but only until the first basket was scored. It was the first of many scores. Basket after basket lead to a big victory. We had one the camp competition As we celebrated that night over Coke floats and pizza, I was reminded of a credit that I had obtained while working a project for school. It was something that Mia Hamm had once said that captivated me and still remains with me this day I am a member of a team, and I rely on the team, I fudge to it and sacrifice for it, because the team, not the individual, is the ultimate hero. Though the team considered me a champion and at first, I wanted to be, to be include, but I realized something from that game. I was never an outsider, really. All mankind, no matter what creed or color, are a part of the human race that la ughs and cries and works and plays. I learned from my basketball summer camp experience that I was sure enough not the only one who was homesick. We were just all missing the homes that we knew. mountain are not as different as we think. There are different situations and circumstances and cultures, but we are all people. That, I learned, makes us all insiders. There are insiders and outsiders everywhere.Organizations even have them. It is a trouble that can split an organization. Outsiders can be due to language barrier, berth in business, or disagreements among employees. According to Forbes. com, In high-conflict climates, 50% of employees say they get less done while fuming, 46% thought about quitting and 37% became less committed to their work. It is proven that when several outsiders are not laughing(prenominal) in the business, it affects their work. Think about it If employees are stewing over something a co-worker did or about the promotion they didnt get, chances are theyre not getting their work accomplishedat least not well.Rather than dealings with more revenue-producing matters, managers report theyre spending 30% of their time dealing with conflict, according to John Ford, founder of John Ford & Associates, a workplace conflict management firm in California. Resolving those issues right away saves time and money and boosts employee retention rates, said Forbes. com. To make employees feel included and help them to get along with one another without having anyone left out, I have made a list of things that I believe are necessary to accomplish the unity goal. 1.Allow all employees to anonymously report when there is an office bully or problem. This helps them know that they do not have to simply put up with what they are going through. 2. Allow all employees a voice. Let them make suggestions and do not forget to give credit where it is due. If a more timid employee comes up with a great idea, then giving him the credit for it can make the other employees respect him more. 3. If there is a language barrier, it would be beneficial to have at least one person who can translate. That would help ease confusion. 4.Make sure that all employees are treated equally. No matter what position they are in. 5. Appreciate all employees. 6. Do not place blame in the workplace. If something goes wrong, it went wrong and blaming will not help matters. Allow the person who made the mistake to right it by coming up with a quick, fortunate plan. 7. Videotaping a meeting could also be a good idea. This way, reviewing who seems to not be participating is easier. Then speak with the one who is not participating and discover and fix the problem. 8. Make sure that employees are trained well enough for their position.If they know what they are doing, they will feel more confident and may participate more. This also decreases the number of mistakes made. 9. Refer to the staff as a team. This automatically suggests unity. 10. Have a coach come in and give important lectures about teams. This could even be an annual monitoring device that the staff is a team. After the meeting, find out if there is anything that could be hindering the unity. From both of my experiences, being an insider and outsider, I think that it is very important that everyone feel like an insider particularly in an organization.I hope that if people do feel left out, as I did in the beginning of my preventive in the United States, that they will tell someone. Communication is the best remedy. flora Cited Hamm, Mia. Mia Hamm Quotes. Thinkexist. 2006. 29 Nov. 2006 <http//en. thinkexist. com/quotation/i-am-a-member-of-a-team-and-i-rely-on-the-team-i/347179. html>. NBA Rules. Basketball. 2002. 29 Nov. 2006 <http//www. basketball. com/nba/rules/rule4. shtml>. Weiss, Tara. Cant We All Just breed Along? Forbes. 2006. 29 Nov. 2006 <http//www. forbes. com/leadership/2006/08/14/leadership-bizbasics-conflict-cx_tw_0815bizbasics. html>.

Dividend Policy Trends

Dividend Policy of Indian Corporate Firms An abridgment of Trends and Determinants Dr. Y. Subba Reddy1 The present make examines the dividend behavior of Indian collective inviolables solely over the dot 1990 2001 and attempts to explain the observed behavior with the serve of trade-off theory, and takealing theory. Analysis of dividend slides for a hulking sampling of billets traded on the NSE and BSE indicate that the per centumage of companies gainful dividends has decreased from 60. 5 sh be in 1990 to 32. shargon in 2001 and that neverthe little a a couple of(prenominal) trustys waste systematically acquiting(a) the fit levels of dividends. Further, dividend- compriseing companies be much exculpateable, bad in coat and evolution doesnt seem to deter Indian souseds from pay high dividends. Analysis of turn of changes in revenue enhancement governance on dividend behavior shows that the tradeoff or evaluate-preference theory does non loo k to befuddle true in the Indian conside balance wheeln. vignette of signaling possibility reinforces the forward scrapeings that dividend omissions thrust cultivation mental ability ab step up future requital.However, synopsis of opposite non-extreme dividend effects such as dividend step-downs and non-reductions shows that received terminati superstars argon an pregnant determinant of dividend reductions for star signs with established track record and that the relative incidence of dividend reduction is more than than more severe in the case of Indian debaucheds comp ard to that of firms traded on the NYSE. Further, dividend changes bet to signal modern-day and lagged remuneration surgery rather than the future winnings performance. 1 Asst. Professor, Institute for Financial Management and Research (IFMR), Chennai.The views expressed and the near suggested argon of the authors and non necessarily of NSE. 1. Introduction From the practiti championrs viewpoint, dividend form _or_ system of government1 of a firm has implications for investors, managers and lenders and early(a)(a) stakeholders. For investors, dividends whether decl bed today or accumulated and provided at a by and by date ar non only a means of unconstipated income2, but similarly an important input in valuation of a firm3. Similarly, managers flexibility to invest in projects is in like manner dependent on the kernel of dividend that they washstand ffer to divisionholders as more dividends may mean someer property available for enthronization. Lenders may alike switch interest in the pith of dividend a firm decl ares, as more the dividend remunerative slight would be the amount available for servicing and redemption of their claims. However, in a complete world as Modigliani and miller (1961) puzzle shown, investors may be unbiased about the amount of dividend as it has no enamour on the appreciate of a firm. Any investor can creat e a home make dividend if required or can invest the proceeds of a dividend defrayal in additional voices as and when a company makes dividend pay.Similarly, managers may be indifferent as funds would be available or could be raised with out any floatation costs for every cocksure net present take account projects. But in reality, dividends may matter, billeticularly in the context of differential value treatment of dividends and detonating device gains. very often dividends are taxed at a high(prenominal) rate compared to chief city gains. This implies that dividends may micturate negative consequences for investors4. Similarly, cost of raising funds is not insignificant and may well lead to lowlyer payout, especial(a)ly when confirmatory net present value projects are available.Apart from flotation costs, knowledge dissymme turn out between managers and outside investors may also hasten implications for dividend insurance. concord to Myers and Majluf (1984), i n the presence of data asymmetry and flotation costs, investment decisions make by managers are subject to the pecking order of financing choices available. Managers prefer keep allowance to debt and debt to fairness flotation to finance the available projects. Information asymmetry between agents (managers) and principals (outside shareholders) may also lead to potency cost (Jensen and Meckling, 1976). atomic go 53 of the mechanisms o reducing expropriation of outside f shareholders by agents is high payout. high school payout will result in reduction of free bullion feed available to managers and this restricts the empire building efforts of managers. The presence of information asymmetry may a mean that managers need to signal their ability to lso generate high dinero in future with the serve of high dividend payouts (Bh sum uparya, 1979, John and Williams 1985, and Miller and Rock, 1985). However, the credibility of signals depends on the cost of signaling the cost being loss of fiscal flexibility.High payout results in reduction of free cash strike when in fact the firm needs more funds to surveil high result opportunities. Rozeff (1994) models payout ratios as a function of three factors flotation costs of external funding, agency cost of outside ownership and financing constraints as a result of high operating and financial leverage5. To summarize, some(prenominal) theories aim been proposed in explaining why companies pay dividends6. While many earlier studies point out the tax-preference theory, more recent studies emphasize signaling and agency cost rationale of dividend earningss.However, the dividend puzzle is yet unresolved and the words of Brealey (1992) poses the dividend policy decision as What is the effect of a change in cash dividends, given the firms capital- ciphering and espousal decisions? In other words, he looks at dividend policy in isolation and not as a by-product of other embodied financial decisions. 2 Lintner (1956) vexs that firms pay first-string and predictable dividends to investors, where as the earnings of integrated firms could be erratic. This implies that shareholders prefer smoothed dividend income. Bernstein (1998) observes that given the concocted earnings estimates provided by firms, the low dividend payout induces reinvestment riskiness and earnings risk for the investors. 4 relentless (1976) notes that in the presence of taxes, investors prefer smaller dividends or no dividends at all. 5 harmonise to Kalay (1982), in the absence of restraining covenants, shareholders can transfer wealth from bondholders by pay off dividend to themselves each by selling existing assets or by reducing investment or by development proceeds of a senior debt. 6 Baker, Powell and Veit (2002) flock different streams of research work on dividends. 2 Fischer Black (Black 1976) may well apply in todays context The harder we look at the dividend picture, the more it seems like a puzzle , with pieces that just breakt fit together. One of the striking aspects that fill been observe in recent results is the move dividend pay by corporate firms in the US. Fama and french (2001) try out the issue of lower dividends paying by corporate firms over the period 1973-1999 and the factors responsible for such a origin. They attribute the decline to changing firm characteristics of size, earnings and ontogenesis. However, it is to be seen whether the change owards lower dividends is a permanent feature or will on that point be reversal. A decline in dividends, according to Fama and cut, could be due to lower achievement costs, improved corporate governance mechanisms, and the increasing preference towards capital gains. 1. 1 Indian Scenario In the Indian context, a a couple of(prenominal) studies charter canvas the dividend behavior of corporate firms. Mahapatra and Sahu (1993) muster up cash flow as a major determinant of dividend followed by net earnings. Bh at and Pandey (1994) undertake a survey of managers perceptions of dividend decision and find that managers perceive present-day(prenominal) earnings as the close to significant factor.Narasimhan and Asha (1997) observe that the uniform tax rate of 10 per centum on dividend as proposed by the Indian union budget 1997-98, alters the select of investors in favor of high payouts. Mohanty (1999) finds that firms, which issued bonus shares, eat up any maintain the pre-bonus level or only decreased it marginally there by increasing the payout to shareholders. Narasimhan and Vijayalakshmi (2002) collapse the modulate of ownership construction on dividend payout and find no influence of insider ownership on dividend behavior of firms.However, it is still not clear as to what is the dividend payment convention of firms in India and why do they initiate and omit dividend payments or reduce or out festering dividend payments. and soce it is proposed to fail the dividend payout o f firms in India and dissect the dividend initiations and omissions and other changes in dividends and the signals that these causas convey. Following Fama and French (2001), the present scan also attempts to psychoanalyze the violation of profitability, size and product on the dividend payout of firms. Similarly, following Healy and Palepu (1988) an attempt is make to analyze the signaling assumption, i. e. arnings information conveyed by dividend initiations and omissions. Since, initiations and omissions construe extreme dividend impressions, changes in dividends i. e. , increases and decreases and the information that they convey is also examined following DeAngelo, DeAngelo and Skinner (1992). There deplete been several changes in the tax regime in the last few forms. The union budget 1997-98 made dividends taxable at t e hands of company paying them and not in the hands of investors receiving them. h Similarly there wear been changes in the capital gains tax and exe mption of dividend income under variance 80 L of the Income Tax Act 1961.All these changes eat implications for the dividend policy of corporate firms. According to tax-preference or trade-off theory, favorable dividends tax should lead to high payouts. Hence it is proposed to analyze the impact of tax regimes on dividend policies of corporate firms. 1. 2 Objectives 1. To study the tendencys in the dividend payment pattern of Indian corporate firms 2. To analyze the impact of changes in dividend tax on the inclination to pay dividends 3. To analyze the influence of firm characteristics such as profitability, growth and size on the dividend payment pattern 4.To analyze the signaling hypothesis, specifically earnings information conveyed by dividend initiations and omissions and 5. To analyze the influence of loss on dividend reductions. 3 In other words, the present study focuses on an depth psychology of dividend trends and attempts to analyze the determinants of these trends w ith the help of trade-off or tax-preference theory and signaling hypothesis. There are other important determinants of dividend behavior such as transactions costs, which we will not analyze, in the present study.In the next Section, we review the relevant literature, followed by a description of the data ascendant employed and methodology adopted in Section 3. Dividend trends are discussed in Section 4, and the depth psychology of characteristics of dividend payers is presented in Section 5. Sections 6 and 7 deal with the signaling hypothesis first the case of dividend initiations and omissions and bit dividend reductions. Section 8 summarizes the finding of study, points out limitations and concludes with directions for further research. 2. Review of germane(predicate) LiteratureDeAngelo, DeAngelo and Skinner (1992) analyses the relationship between dividends and losses and the information conveyed by dividend changes about the earnings performance. They examine the dividend be haviour of 167 NYSE firms with at least(prenominal) one annual loss during 1980-95 and those of 440 firms with no losses during the same period, where all the firms had a consistent track record of ten or more long meter of positive earnings and dividends. They find that 50. 9% of 167 firms with at least one loss during 1980-95 reduced dividends, compared to 1% of 440 firms without losses.Their findings support signaling hypothesis in that dividend changes improve the ability to predict future earnings performance. Glen et al. (1995) study the dividend policy of firms in emerging trades. They find that firms in these markets fuddle a target dividend payout rate, but less concerned with volatility in dividends over judgment of conviction. They also find that shareholders and governments exert a great deal of influence on dividend policy and observe that dividends beget little signaling content in these markets. Benartzi, Michaely, Thaler (1997) analyzes the issue of whether div idend changes signal the future or the past.For a sample of 7186 dividend announcements made by NYSE or AMEX firms during the period 1979-91, they find a lagged and contemporaneous relation between dividend changes and earnings. Their analysis also shows that in the deuce course of instructions following dividend increases, earnings changes are unrelated to the sign and magnitude of dividend changes. Bernsterin (1998) expresses concern over the decline in payout over a period of time in the US market. He observes that given the concocted earnings estimates provided by firms, the low dividend payout induces reinvestment risk and earnings risk for the investors.He asserts that try calculating the historical correlation between payout ratios in stratum t and earnings growth over t + 5. The correlation coefficient is positive and statistically significant 7. Fama and French (2001) analyze the issue of lower dividends gainful by corporate firms over the period 1973-1999 and the facto rs responsible for the decline. In particular they analyze whether the lower dividends were the effect of changing firm characteristics or lower proclivity to pay on the part of firms.They observe that similitude of companies paying dividend has dropped from a peak of 66. 5 part in 1978 to 20. 8 percent in 1999. They attribute this decline to the changing characteristics of firms The decline in the incidence of dividend payers 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 cause never pay dividends8. Baker, Veit and Powell (2001) study the factors that flip a bearing on dividend policy decisions of corporate firms traded on the Nasdaq. The tudy, based on a sample survey (1999) response of 188 firms out of a extreme of 630 firms that pay dividends in each quarter of schedule forms 1996 and 1997, finds that the following four factors sacrifice a significant impact on the dividend decision pattern of past dividends, stability 7 8 Bernstein (1998), pp. 1. Fama and French (2001), p. 79 4 of earnings, and the level of electric up-to-the-minute and future evaluate earnings. The study also finds statistically significant diversity of opinions in the importance that managers attach to dividend policy in different industries such as financial versus non-financial firms.Ramacharran (2001) analyzes the strain in dividend effect for 21 emerging markets (including India) for the period 1992-99. His macroeconomic fire using country risk data finds evidence for pecking order hypothesis lower dividends are paid when high growth is expected. The study also finds that political risk factors gravel no significant impact on dividend payments of firms in emerging markets. Lee and Ryan (2002) analyze the dividend signaling-hypothesis and the issue of direction of condition between earnings and dividends whether earnings cause dividends or vice versa.F or a sample of 133 dividend initiations and 165 dividend omissions, they find that dividend payment is influenced by recent performance of earnings, and free cash flows. They also find evidence of positive (negative) earnings growth introductory dividend initiations (omissions). 2. 1 Previous Indian Studies Kevin (1992) analyzes the dividend distribution pattern of 650 non-financial companies which closed their accounts between September 1983 and August 1984 and net sales income of one crore rupees or more. He finds evidence for a sticky dividend policy and concludes that a change in profitability is of minor importance.Mahapatra and Sahu (1993) analyze the determinants of dividend policy using the models developed by Lintner (1956), Darling (1957) and Brittain (1966) for a sample of 90 companies for the period 1977-78 1988-89. They find that cash flow is a major determinant of dividend followed by net earnings. Further, their analysis shows that past dividend and not past earning s is a significant factor in influencing the dividend decision of firms. Bhat and Pandey (1994) study the managers perceptions of dividend decision for a sample of 425 Indian companies for the period 1986-87 to 1990-91.They find that on an come profit-making Indian companies rescue distributed about one-third of their net earnings and that the medium dividend payout ratio is 43. 6 percent. They also find that the bonny dividend payout ratio is 54 percent for the sample of both profitmaking and loss-making companies and the mediocre dividend rate is in the chain of 14. 3 percent to 19. 2 percent. They also observe variation in dividend policy of different industries. Further, a survey of these 425 companies has been attempted. How ever, only 31 questionnaires let been authentic and of these they find 28 amenable for further analysis.Their analysis of the respondents shows that managers perceive up-to-date earnings as the most significant factor influencing their dividend dec ision followed by patterns of past dividends. They also find two other multivariates increasing equity base and expected future earnings to engender significant influence. However, they find perseverance to gather in the least influence on the dividend, which has been contrary to the expectations. Mishra and Narender (1996) analyze the dividend policies of 39 state-owned enterprises (SoE) in India for the period 1984-85 to 1993-94.The find that earnings per share (EPS) is a major factor in deter tap the dividend payout of SoEs. Narasimhan and Asha (1997) discuss the impact of dividend tax on dividend policy of firms. They observe that the uniform tax rate of 10 percent on dividend as proposed by the Indian union budget 1997-98, alters the demand of investors in favor of high payouts rather than low payouts as the capital gains are taxed at 20 percent in the verbalise period. Mohanty (1999) analyzes the dividend behavior of more than 200 firms for a period of over 15 geezerhood .He finds that in most bonus issue cases firms comport either maintained the pre-bonus level or only decreased it marginally there by increasing the payout to shareholders. The study also finds that firms that declared bonus during 1982-1991 showed high returns to their shareholders compared to firms which did not issue bonus shares but maintained a plastered dividend growth. He finds evidence for a reversal of this trend in the 1992- 5 1996 period. He attributes such a reversal in trend to the changed schema of multi-national corporations (MNCs) and their reluctance to issue bonus shares.Narasimhan and Vijayalakshmi (2002) analyze the influence of ownership structure on dividend payout of 186 manufacturing firms. Regression analysis shows that promoters holding as of September 2001 has no influence on come dividend payout for the period 1997-2001. 3. Database and Methodology 3. 1 Database Dividend payment pattern of all companies that are listed for trading on one of the two m ajor exchanges namely National Stock alter (NSE) and Bombay Stock Exchange (BSE) during the period 1989-1990 to 2000-2001 (we refer each division henceforth with the end year i. e. for 2000-2001 to 2001) are employed for analysis. The data has been sourced from Prowess database of the Centre for Monitoring Indian Economy (CMIE). For the habit of this study, only final cash dividends are considered and contain repurchases and stock dividends are not considered. Unlike the firms in developed countries that pay quarterly dividends, Indian companies typically pay only one dividend during a year. A few firms do pay interim dividends, however, data regarding these are not readily accessible and it is extremely difficult to get such data for a occasionable number of long time.Further, stock repurchases have been permitted only recently and only about a hundred companies have bought derriere their stocks so far. Hence, in the present study stock repurchases are not considered for anal ysis. Stock price data for the prior year of dividend announcement are also taken from the Prowess database. 3. 2 Methodology for Analysis of Trends To analyze the trends in dividend payment pattern, number of companies paying dividend as parcel of numerate firms, average dividend paid, dividend per share, payout ratio, and dividend father are computed for the period 1990 to 2001.Dividend per share (DPS) is calculated as DPS j ,t = Dividend j ,t EQCap j ,t Where, DPSj,t refers to dividend per share for company j in year t Dividend j,t refers to amount of dividend paid by company j in year t and EQCap j,t refers to paid -up equity capital for firm j in year t. Equity capital is employed sort of of the usual number of outstanding shares in the denominator as it facilitates comparison of rupee dividend paid per share by removing the impact of different face or par values. Dividend payout ratio (PR) is computed as PR jt = Dividend j , t sleek j ,tWhere, PR j,t is dividend payout ra tio, Dividend j,t refers to amount of dividend paid by company j in year t and tossj,t refers to net profit or profit after tax for firm j in year t. Dividend throw (DY) is computed as 6 DY jt = DPS j ,t Price j ,t ? 1 t Where, DYjt refers to dividend military issue for firm j in year t, DPSjt refers to dividend per share for firm j in year , and Pricej,t-1 is closing price of earlier year for firm j. Further, the entire sample is categorized into payers and non-payers to examine the trends in dividends crosswise different subradicals. remunerators are those firms that have paid dividend in the legitimate year, where as nonpayers have not paid dividend in the genuine year. Payers are further classified into prescribed payers, initiators and live payers. fastness payers are those firms that have paid dividend repairly without ever skipping the payments. provokers on the other hand refers to those firms with a maiden dividend, where as sure payers are those firms who are ne ither official payers nor initiators. Non-payers are further categorized into never paid, cause payers and latest non-payers. neer paid firms are those that have never paid even a single dividend, where as former payers are those firms which at some precedent point had paid dividends. circulating(prenominal) non-payers are those firms which are recently listed and that they are neither former-payers nor are in the never paid category in any of the previous years. 3. 3 check of Tax Regime diverseness Test of Trade-off Theory Paired samples t-test has been employed to analyze the influence of changes in dividend tax during 199798 on the dividend lust of Indian corporate firms.According to the tradeoff theory, corporate firms pay more dividends when the dividend tax is low compared to that of capital gains tax. The tax regime ushered in during 1997-98, whereby dividends are taxed at source at a uniform rate of 10%, has tilted the balance in favor of dividends. Changes in divide nds are captured with the help of two measures dividend per share and dividend payout character. For this purpose total dividend per share and average dividend payout percentage during the previous tax regime, i. e. the incidence of dividend tax is on the investors are compared with that of changed tax regime where dividend taxes are collectable by corporate firms at a flat rate of 10%. The period 1994-95 to 1996-97 constitutes the first sub-period and the period 1998-99 to 2000-01 constitutes the second period. The following hypotheses are tried and true using paired samples t-test (i) Null hypothesis of no residues between the total dividend per share between the two periods and (ii) Null hypothesis of no difference between the average percentage payout between the two periods.Further, changes in the propensity of stiff payers and changes in the payment pattern between 1996-97 and 1998-99 as a result of change in tax regime are also tested. 3. 4 Characteristics of Payers and Non-Payers Consistent with Fama and French, logit regression coefficients are estimated to analyze the influence of firm characteristics on the dividend payment pattern, for each year t during 1990-2001. The dependent variable assumes a value of 0 when the firm pays no dividend and assumes a value of 1 when pays a dividend.The instructive variables are Et/At is profitability thrifty as the ratio of hoard up earnings in advance interest to gist assets dAt/At, is growth rate of assets Vt/At is market-to- keep ratio i. e. , the ratio of the aggregate market value to the aggregate throw value of assets and the NSEPt is the percent of firms with the same or lower market capitalization. Coefficients are computed for each of the year 7 and the aggregate coefficients and associated t values are analyzed to infer the influence o profitability, f growth and size. 3. Test of Signalling Hypothesis Case of Dividend Initiations and Omissions For this part of the analysis, a firm is classif ied as initiator if it has paid dividend in the current year but has not paid dividends for the preceding 3 years. Similarly a firm is categorized as omission firm, if the firm has not currently paid dividend but has paid dividend in the preceding three years. To analyze signaling hypothesis, consistent with Healey and Palepu, earnings patterns of firms initiating and omitting dividend for 3 years forrader the year of termination and 3 years after event are examined.To aggregate results across firms, earnings changes in these years are expressed as a percentage of the previous years closing stock price, PJ. The standardized change in earnings for firm j in year t, is defines as ? E j ,t = E j ,t ? E j ,t ? 1 Pj Where Ej,t are earnings per share before extraordinary items and discontinued operations9 for firm j in year t. The null hypotheses of average earnings changes are zip fastener is tested with the help of Dunnetts C (Post Hoc) test. Analysis pertaining to initiations and om issions only cover a particular sample of extreme events and excludes firms not having a dividend track record of less than 3 years.In order to cover other dividend events like dividend reductions and increases in the following we arrive at yet another sample. 3. 6 Test of Signaling Hypothesis Case of Dividend Reductions To analyze the relationship between dividends and losses a sample is drawn with firms having consistent profitability and dividend track records during 1990 1995 and who have earnings and dividend information for the period 1996 2001. The importance of annual losses on dividend reductions and annual dividend omissions has been analyzed with the help of logit analysis.The dependent variable touch ons zero if a firm has maintained or change magnitude its dividend per share and is equal to one if the firm announced a reduction in dividend per share. The loss dope assumes a value of one if the firm reports a loss for the year under study and zero otherwise. The lev el of net income and changes in net income are standardized with the previous years net outlay for each firm. For firms in loss sample, the initial loss year constitutes the event year where as for non-loss firms, the initial year of earnings decline constitutes the event year.Similarly to examine the influence of past and future levels of earnings logit analysis has been employed on the subset for event years 1997 and 1998. The dependent variable equals zero if a firm has maintained or increase its dividend per share and is equal to one if the firm announced a reduction in dividend per share. The explanatory variables are earnings in 1 year before the event (t-1), 2 years preceding the event (t-2), current earnings (t), earnings in the year following the event year (t+1), earnings in 2 years following the event (t+2).Similarly, mean difference in earnings over t 2 through t+2 years is also examined with the help of Dunnetts C test. This analysis would be useful in deterdigging whe ther dividend changes are impacted by contemporaneous or lagged or expected earnings performance. 9 In the Indian context an approximate value for this is derived from other income. 8 4. Trends in Dividends and Influence of Changes in Tax Regime clean profit after tax ( upchuck) has change magnitude from Rs. 4. 68 crore in 1990 to Rs. 6. 11 crore in 2000 and Rs. 9. 36 crore in 2001 ( tabularise 4. 1).However, there have been several fluctuations in average PAT reflecting the changes in Indian economy. In the early phases of economic reform, many firms had to restructure as the economy was opened up and structural adjustments were undertaken resulting in a reduction in PAT. The subsequent pick up in the mid -90s has seen an increase in average PAT. The late 1990s, which marked a significant decline in economic activity, have had their impact on PAT of firms. 4. 1 intermediate Dividend paid Despite fluctuations in PAT, the average aggregate dividend payments have stunner increase d from Rs. . 99 crore in 1990 to Rs. 2. 93 crore in 2000 and Rs. 4. 19 crore in 2001. Further, compared to PAT the dividend payments have exhibited a smooth trend implying that dividend smoothening is occurring in the Indian context ( finger 4. 1). Table 4. 1 Trend in Dividends and PAT During 1990-2001 Year Number of Firms 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Common Firms 1707 2184 2505 3097 4020 5115 5600 5855 5980 6248 6225 4766 871 bonnie Dividend Rs. Crore 0. 99 0. 98 1. 11 1. 11 1. 27 1. 56 1. 85 2. 05 2. 26 2. 9 2. 93 4. 19 SD of clean SD of Dividend PAT PAT Rs. Crore Rs. Crore Rs. Crore 3. 92 4. 68 48. 45 3. 79 4. 05 37. 88 4. 54 4. 19 40. 45 4. 85 3. 06 46. 76 6. 19 4. 15 51. 41 8. 42 6. 96 57. 55 10. 80 7. 19 62. 92 13. 91 6. 38 65. 65 17. 18 5. 69 103. 52 22. 14 5. 09 88. 19 26. 46 6. 11 103. 54 44. 71 9. 36 134. 39 Number of firms paid dividend during the study period have shown an up trend till 1995 and have go subsequently (cecal appendage see to it 4. 1), where as the percentage of companies paying dividends has declined from 60. percent in 1990 to 32. 1 percent in 2001 (Table 4. 2 and record 4. 2). This is consistent with the trend observed in the US market (Fama and French 2001). The fact that percentage of companies paying dividends have declined whereas the average dividend paid has increased implies tha t companies which have been paying dividend have paid higher amounts in recent years. hit non-payers have steadily increased from 1990 to 2000 before declining slightly in 2001 ( appendix Table A4. 1 and inserts A4. 2 and A4. 3).Firms, which have never paid dividend, constituted a significant proportion through out the sample period constituting more than 50% from 1991 to 2001 continuously. The number of firms, which at some previous time paid dividend, have increased overtime and reached almost 50% of non-payers in 2001. general anatomy 4. 1 9 Trend in Average Dividends, and PAT During 1990-2001 Average Divi dend Average PAT 10 9 8 7 6 5 4 3 2 1 0 1990 1992 1994 1996 1998 2000 Rs. Crores Year Table 4. 2 Trend in Dividend Payments During 1990-2001 Year Paid Dividend No. 033 1272 1533 1823 2333 2775 2723 2386 2101 2007 1988 1531 % 60. 50 58. 20 61. 20 58. 90 58. 00 54. 30 48. 60 40. 80 35. 10 32. 10 31. 90 32. 10 Not Paid Dividend No. 674 912 972 1274 1687 2340 2877 3469 3879 4241 4237 3235 % 39. 50 41. 80 38. 80 41. 10 42. 00 45. 70 51. 40 59. 20 64. 90 67. 90 68. 10 67. 90 Total Number of Firms 1707 2184 2505 3097 4020 5115 5600 5855 5980 6248 6225 4766 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Total number of firms paying dividend has increased up to 1995 and has registered sustained decline there after (Table 4. , Appendix Figures A4. 4 and A4. 5). Mirroring these trends firms, which have paid dividends unbendablely, peaked in 1995 and recorded declines thereafter. initiators have shown a steady decline from 1991 and have fallen to 5% in 2001. Average dividend paid by payers has increased steadily from Rs. 1. 69 crore in 1991 to Rs. 9. 16 crore in 2000 and Rs. 13. 05 crore in 2001 (Figure 4. 3, Appendix Table A4. 2). continuous payers are more in number and have paid higher average dividend compared to that of current payers and initiators (Appendix Figures A4. 6 and A4. 7). accredited payers have paid higher dividend compared to initiators overlook in the year 2001. The number of initiators have increased up to the year 1995 and have shown a decline thereafter, where as current payers have steadily increased in number up to 2000. 10 Figure 4. 2 Dividend Behaviour of Indian Corporate Firms During 1990 2001 (in %) 80% 70% 60% % Non-Payers % Payers % of Firms 50% 40% 30% 20% 10% 0% 1990 1992 1994 1996 1998 2000 Year Figure 4. 3 Comparision of Average Dividend Paid During 1991 2001 by Payer Group Initiator Current Payers uniform Payers Total Payers 20 15 10 5 0Rs. Crore 1991 1993 1995 1997 1999 2001 Year A comparison of major power and non- index firms shows that the former group of companies on average has paid more dividend than the latter(prenominal) group (Table A4. 3 and A4. 4). Similarly, it is observed that companies, which constitute popular market indices such as Sensex and nifty paid more dividends compared to companies in the broad market indices such as BSE 100, CNX Mid-Cap, BSE 200, CNX 500, and BSE 500. These observations are on the expected lines as higher dividend payment is one of the important criteria for inclusion of stocks into indices.A study of number of companies paying dividend also reveals that a significantly big proportion of index firms have paid dividend compared to non-index firms. 29 out of 30 Sensex firms and 49 out of 50 Nifty firms have paid dividend in 2001, the ejection being Tata Engineering and Locomotive Company Ltd. (TELCO). Analysis of industry-wise average dividend paid shows that in the early 1990s, firms in the diversified industry have paid more dividends followed by min ing firms and electricity firms (Table 4. 3).However, by the end of 2000 and 2001 firms in the electricity industry have paid more dividend followed by mining and diversified companies. It has also been observed that material companies have continued to pay low amounts on an average throughout the sample period where as firms in the financial services industry have improved their average dividend payments over the sample period. The recent h growth firms in the figurer igh 11 hardware and software system segments, which are part of the machinery industry, have broadly shown lower dividend payments.In sum, the number of firms paying dividend during the study period have shown an up trend till 1995 and have fallen subsequently. Further, compared to PAT the dividend payments have exhibited a smooth trend implying that dividend smoothening is occurring in the Indian context. Regular payers are more in number and have paid higher average dividend compared to that of current payers and initiators. Of the nonpayers, former payers are growing in numbers. Index firms face to pay higher dividends compared to that of non-index firms. Further, smaller indices egress to have higher average dividend compared t that of o larger indices. labor trends indicate that firms in the electricity, mining and diversified industries have paid more dividend where as textile companies have paid less dividends. Firms in the machinery industry which includes computer hardware and software segments have shown lower dividends. Table 4. 3 INDUSTRY Average Dividend Paid During 1990-2001 Industry-wise (in Rs. Crore) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1. 09 3. 56 1. 28 . 67 . 88 . 70 . 80 2. 57 . 39 . 50 1. 02 . 48 1. 25 . 96 3. 88 1. 14 1. 39 . 97 . 65 . 90 2. 79 . 51 . 62 . 76 . 47 1. 17 1. 05 4. 24 1. 19 1. 47 . 98 . 72 1. 37 2. 97 . 72 . 70 . 86 . 47 1. 0 . 97 5. 11 2. 26 1. 38 . 89 . 73 1. 36 3. 57 . 62 . 64 . 92 . 53 1. 06 1. 08 6. 14 5. 85 1. 49 . 94 . 83 1. 72 2 . 87 . 73 . 63 1. 01 . 72 1. 39 1. 38 1. 57 1. 69 1. 92 7. 72 10. 13 10. 99 12. 86 9. 54 13. 08 18. 31 17. 37 2. 10 2. 46 2. 72 3. 16 1. 02 . 80 . 90 1. 12 . 99 1. 11 1. 13 1. 20 2. 20 2. 39 2. 14 1. 80 2. 94 8. 87 17. 44 22. 23 . 70 . 75 . 57 . 35 . 85 1. 18 1. 00 . 86 1. 07 1. 18 1. 23 1. 34 . 86 . 82 . 58 . 51 2. 02 2. 83 3. 58 3. 18 1. 68 17. 17 26. 33 3. 20 1. 13 1. 34 1. 40 21. 99 . 56 . 90 1. 34 . 48 2. 95 2. 41 22. 76 27. 24 4. 25 1. 34 1. 58 1. 72 26. 31 . 58 1. 12 1. 42 . 56 3. 44 2001 Firms 2. 46 29. 55 48. 7 5. 29 1. 89 2. 11 3. 08 35. 36 1. 05 1. 51 4. 07 . 56 3. 03 1138 184 58 1097 745 1065 555 81 324 296 1264 750 225 Chemicals and Plastics modify Electricity Financial service Food and Beverages Machinery alloys and Metal Product mine Misc. Manufacturing Non-Metallic Mineral Pro separate work Textiles conveyance Equipment 4. 2 Dividend Per Share Average dividend per share (DPS) has increased from 14 paisa in 1990 to 26 paisa in 2000 and 15 paisa in 2001 (Table 4. 4, Figure 4. 4). An analysis of distribution of firms shows that 39 percent have paid cypher DPS in 1990 and the percentage has increased to 67. 7 in 2001 (Table 4. ). office of firms in the average class i. e. , DPS in the range of Rs. 0 to Rs. 0. 25 have declined from a high of 45. 9 in 1990 to 18. 5 in 2001. This implies that the increased average DPS over the latter period has mainly been due to a few firms paying larger DPS. Firms in chemicals and plastics industry have steadily improved their DPS from 14 paisa in 1990 to 27 paisa in 2000 and 25 paisa in 2001 (Table 4. 6). Where as textiles firms have shown a decline in DPS from 13 paisa in 1990 to 6 paisa in 2001. Machinery firms have paid a steady 12 to 14 paisa except for the years 1996 and 1997 when they paid marginally more.An analysis of index and non-index firms DPS shows that index firms on an average paid more DPS than non-index firms (Table A4. 14). Similarly, narrow indices have high average DPS than broad indices . 12 Table 4. 4 Average Dividend Per Share (DPS) During 1990-2001 (in Rs. ) Year Number Minimum Maximum of Firms DPS DPS 1990 1694 0 12. 71 1991 2153 0 10. 58 1992 2468 0 15. 58 1993 3028 0 51. 2 1994 3953 0 57. 5 1995 5032 0 135. 33 1996 5536 0 174. 67 1997 5801 0 222 1998 5911 0 350. 33 1999 6176 0 249. 75 2000 6167 0 266. 38 2001 4734 0 61. 5 Common 866 Firms10 Average DPS 0. 1406 0. 1385 0. 1427 0. 1514 0. 1582 0. 803 0. 2158 0. 198 0. 2337 0. 2544 0. 2571 0. 1538 Std. Deviation 0. 3455 0. 3009 0. 3568 1. 0025 1. 2983 2. 3543 3. 3243 3. 4834 5. 8833 4. 8938 4. 4156 1. 2899 Average DPS (1% trimmed) by all payers have increased from 21 paisa in 1991 to 31 paisa in 2000 and 29 paisa in 2001 (Figure 4. 5). Of the payers, regular payers have consistently paid more dividend per share compared to other payers. Similarly initiators have always paid lower dividend per share compared to current payers. Figure 4. 4 Average Dividend Per Share (DPS) During 1990-2001 Average DPS (in Rs. ) Ave rage DPS 0. 30 0. 25 0. 20 0. 15 0. 10 0. 05 0. 0 1990 1992 1994 1996 1998 2000 Year An analysis of recurrence of dividend per share group shows that two firms have consistently paid dividend in the range of 25 to 50 paisa per share for all the 12 years, where as 18 firms have paid up to 25 paisa (Appendix Table A4. 6 and A4. 7). An analysis of dividend reductions by firms shows that only five companies namely Mahindra sinter Products Ltd, Otis Elevator Co. (India), Bharat Electronics, Amritlal Chemaux, and Carborundum Universal have consistently paid higher dividend per share out of a 330 firms that paid dividends in all years of the sample period (Appendix Table A4. ). 43 firms registered a single congressman of dividend per share reduction, where as 68 firms lowered twice, 82 firms lowered thrice etc. On the whole average DPS has shown a steady growth except in the year 2001. Regular payers have consistently paid more dividend per share compared to other payers, where as initiat ors have always paid 5 common firms are lost on account of miss information on number of outstanding stocks and hence there is difference in the number of common firms from that of Table 4. 1. 10 13 lower dividend per share. Analysis also shows that only a few firms have consistently paid same levels of dividend.Index firms on an average paid more DPS than non-index firms. Similarly, narrow indices have high average DPS than broad indices (Appendix table A4. 8). Firms in chemicals and plastics industry have steadily improved their DPS, where as textiles firms have shown a decline in the study period. Machinery firms have paid a steady DPS. Figure 4. 5 1% thinned Dividend Per Share by Payer Type Current Payers Initiators Regular Payers Total 0. 35 0. 3 DPS (in Rs. ) 0. 25 0. 2 0. 15 0. 1 0. 05 1991 1993 1995 1997 1999 2001 Year Table 4. 5 diffusion of Firms in terms of Dividend Per Share During 1990 2001 DPS Rs. Rs. 0 0. 25 Rs. 0. 25 0. 50 Rs. 0. 50 0. 75 Rs. 0. 75 1 Rs. 1 2 Rs. 2 5 > Rs. 5 Percentage of Companies in Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 39 41 37. 9 39. 9 41. 1 44. 9 50. 8 58. 9 64. 5 67. 5 67. 8 67. 7 45. 9 43. 1 46. 2 46. 9 45 42. 3 35. 8 27. 5 22. 2 19. 5 18. 6 18. 5 13. 5 13. 7 13. 7 11. 2 12. 1 10. 6 10. 4 9. 8 8. 7 7. 6 7. 4 7. 8 0. 9 1. 3 1. 4 0. 9 0. 7 1. 1 1. 5 2. 3 2. 8 2. 5 2. 6 2. 7 0. 4 0. 5 0. 4 0. 7 0. 8 0. 4 0. 6 0. 6 0. 6 1. 1 1. 2 1. 3 0. 2 0. 3 0. 3 0. 2 0. 2 0. 3 0. 4 0. 6 1 1. 1 1. 4 1. 4 0. 1 0. 1 0 0. 1 0. 1 0. 2 0. 2 0. 1 0. 0. 3 0. 6 0. 4 0. 1 0 0 0. 2 0. 1 0. 1 0. 2 0. 2 0. 2 0. 3 0. 4 0. 3 Table 4. 6 Industry-wise Dividend Per Share (DPS) During 1990-2001 (in Rs. ) INDUSTRY Chemicals and Plastics Diversified Electricity Financial function Food and Beverages Machineray Metals and Metal Product Mining Misc. Manufacturing Non-Metallic Mineral Pro Other Services Textiles Transport Equipment 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 FIRMS . 14 . 15 . 14 . 12 . 17 . 15 . 12 . 17 . 17 . 18 . 27 . 25 1138 . 19 . 21 . 26 . 20 . 20 . 19 . 21 . 22 . 21 . 22 . 27 . 21 184 . 13 . 10 . 11 . 11 . 11 . 10 . 12 . 9 . 10 . 10 . 13 . 10 58 . 08 . 11 . 13 . 34 . 24 . 21 . 28 . 12 . 15 . 14 . 19 . 18 1097 . 20 . 20 . 18 . 23 . 31 . 47 . 49 . 58 . 85 . 21 . 16 . 13 745 . 12 . 13 . 14 . 14 . 13 . 13 . 17 . 19 . 12 . 14 . 14 . 14 1065 . 13 . 11 . 11 . 09 . 10 . 10 . 12 . 09 . 07 . 06 . 07 . 07 555 . 05 . 07 . 06 . 07 . 09 . 06 . 07 . 08 . 13 . 10 . 11 . 09 81 . 12 . 12 . 14 . 10 . 11 . 10 . 10 . 15 . 06 . 16 . 21 . 30 324 . 10 . 11 . 11 . 09 . 09 . 09 . 10 . 08 . 08 . 07 . 09 . 09 296 . 17 . 15 . 17 . 15 . 13 . 24 . 38 . 28 . 42 . 88 . 73 . 12 1264 . 13 . 14 . 13 . 11 . 12 . 09 . 08 . 06 . 06 . 05 . 07 . 06 750 . 2 . 12 . 12 . 12 . 13 . 13 . 15 . 18 . 16 . 15 . 21 . 17 225 14 4. 3 Dividend Payout Ratio An analysis of average percentage dividend payout (PR) during 1990 2001 shows a volatile trend (Table 4. 7 and Figure 4. 6). Percentage PR increased from 27. 39 in 1990 to 32. 95 in 1997 and then showed a declining trend till 2000 before reaching the peak average percentage PR of 40. 53 in 2001. However, 1% trimmed average percentage PR showed a more unchangeable pattern of around 24 percent PR up to 1997 and then has shown a declining trend before finally reaching 16. 81 percent in 2001 (Appendix Table A4. ). Table 4. 7 Average Percentage Payout During 1990 2001 Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 No. of Average Std. Firms % Payout Deviation 1382 1714 2022 2533 3156 3770 4042 4258 4335 4503 4383 3387 27. 39 25. 19 27. 54 27. 98 28. 19 25. 88 27. 44 32. 95 31. 39 22. 82 21. 6 40. 53 37. 77 41. 04 48. 31 37. 83 61. 96 38. 06 88. 12 139. 85 453. 37 120. 19 67. 49 1196. 96 1% thinned Average % Payout 24. 98 23. 11 24. 25 25. 72 24. 92 23. 84 23. 99 23. 91 18. 64 16. 98 17. 47 16. 81 1% Trimmed No. of Firms 1369 1697 2002 2508 3125 3733 4002 4216 4292 4458 4340 3354An analysis of distribution of firms by dividend payout percentage shows that as high as 26 percent of firms in 1990 and 56. 6 percent in 2001 have paid out nothing (Table 4. 8 and Appendix, Figure A4. 6). However, more than 10 percent firms have paid dividend in trim of 75 percent of their net profits. An analysis of dividend payout recurrence shows that very few firms have maintained the same payout for a longer period of time (Appendix Table A4. 10 and A4. 11). For instance, only one firm Hindustan Lever special has paid out a dividend in the range of 50 to 75% of its net profit for entire sample period.Similarly another firm Maharashtra Scooters Limited maintained a dividend payout in the range of 10 to 20% for 11 of the 12-year sample period. Similarly, Kinetic Engineering Ltd. , Lakshmi Machine Works Ltd. , and Dalmia cementum (Bharat) Ltd. have paid out in the range of 10 20% for 10 of the 12-year sample period. Figure 4. 6 Average % Payout During 1990-2001 Average % Payout 50 40 30 20 10 0 1990 1992 1994 1996 1998 2000 1% Trimmed Average % Payout Average Payout % Year 15 An analysis of industry-wise DPO shows a declining trend across all industries during the sample period (Table 4. ). Diversified firms, which have a DPO in excess of 25 percent in 1990, have less than 14 percent in 2001. Firms in metals and metal products industry have registered a high degree fall in DPO from 22. 84 percent in 1990 to 8. 74 percent in 2001. Table 4. 8 dispersion of Firms Payout Percentage During 1990 2001 Dividend Payout % 0 0 10 10 20 20 30 30 40 40 50 50 75 75 100 100 200 > 200 Firms % of Firms 1990 1991 26 6. 9 14. 5 16. 5 12. 6 8. 2 10. 1 3. 5 1. 2 0. 4 1382 1992 1993 28. 9 7. 2 11. 9 13. 5 12. 3 9. 5 10. 5 4. 6 1. 3 0. 4 2533 1994 26. 6 8 14. 3 15 12. 7. 7 10. 2 4. 5 0. 9 0. 3 3156 1995 26. 7 6. 6 15. 6 16. 7 12. 5 8. 7 8. 6 3. 4 0. 9 0. 3 3770 1996 33. 3 5. 5 13. 6 13. 7 10. 8 7. 3 8. 6 5. 4 1. 4 0. 4 4042 1997 1998 1999 2000 2001 45. 4 52. 8 57 55. 8 56. 6 3. 1 3. 4 3. 4 3. 8 3. 8 7. 9 7. 6 6. 7 6. 6 7. 6 10. 9 9. 8 8. 2 8. 9 7. 9 8. 5 7. 5 6. 9 6. 7 6. 9 6. 4 5. 4 5. 2 5. 4 4. 8 9. 1 7. 8 6. 7 6. 5 7. 1 5. 2 3. 2 3. 9 4. 2 3. 2 2. 1 1. 6 1. 3 1. 5 1. 5 1. 3 1 0. 7 0. 7 0. 7 4258 4335 4503 4383 3387 26. 5 25. 3 9. 3 9. 2 14. 1 13. 9 17. 2 16. 1 12. 6 13. 3 7. 1 8. 8 9 8. 9 2. 9 2. 7 0. 9 1. 4 0. 2 0. 4 1714 2022 Table 4. 9Industry-wise Dividend Payout During 1990 2001 (in %) INDUSTRY Chemicals and Plastics Diversified Electricity Financial Services Food and Beverages Machineray Metals and Metal Product Mining Misc. Manufacturing Non-Metallic Mineral Pro Other Services Textiles Transport Equipment 1990 23. 92 25. 28 17. 98 23. 28 24. 47 23. 93 22. 84 10. 28 18. 10 19. 71 20. 01 16. 83 19. 31 1991 20. 38 20. 95 16. 21 27. 01 23. 15 20. 36 21. 47 7. 29 18. 08 17. 75 21. 15 15. 98 19. 96 1992 21. 51 22. 78 14. 15 28. 50 24. 19 22. 87 19. 86 12. 28 15. 69 16. 95 19. 25 17. 26 21. 61 1993 23. 38 25. 48 13. 37 32. 11 22. 4 23. 42 20. 65 9. 56 17. 18 16. 27 19. 84 20. 98 21 . 29 1994 20. 14 22. 74 12. 48 29. 87 20. 40 23. 67 20. 92 14. 04 17. 87 14. 78 21. 15 20. 54 23. 26 1995 21. 88 23. 23 16. 98 27. 25 17. 01 22. 07 19. 76 12. 10 18. 91 14. 92 19. 60 19. 20 20. 99 1996 20. 53 21. 61 12. 70 31. 74 17. 23 20. 83 18. 82 16. 58 17. 81 13. 87 19. 34 17. 30 19. 69 1997 18. 37 23. 27 16. 32 29. 19 16. 14 19. 45 16. 78 14. 65 15. 55 13. 62 17. 43 13. 84 22. 46 1998 14. 76 19. 34 10. 42 16. 12 12. 73 16. 28 12. 56 11. 50 9. 84 10. 78 14. 00 11. 29 20. 96 1999 13. 84 17. 41 9. 35 14. 82 12. 67 15. 36 9. 37 9. 87 12. 8 9. 66 12. 27 7. 99 18. 74 2000 14. 18 17. 52 12. 68 16. 21 12. 80 15. 24 9. 16 11. 98 12. 59 8. 93 12. 85 9. 04 20. 18 2001 13. 71 13. 59 13. 08 14. 30 10. 22 15. 15 8. 74 11. 76 15. 09 11. 29 12. 54 8. 02 17. 29 Total payers have registered an increase in payout from 31. 25% in 1991 to a peak of 43. 02% in 1997 and finally paid out 37. 64% in 2001 (Figure 4. 7 and Appendix Table 4. 12). Of the payers, regular payers have consistently paid highe r payout compared to that of current payers. Further, initiators have shown higher fluctuations in their payout compared to that of regular payers.In sum, average percentage PR showed a more stable pattern up to 1997 and then has shown a declining trend. Analysis of dividend payout recurrence shows that very few firms have maintained the same payout for a longer period of time. Industry-wise DPO shows a declining trend across all industries during the sample period. Of the payers, regular payers have consistently paid higher payout compared to that of current payers. Further, initiators have shown higher fluctuations in their payout compared to that of regular payers. 16 Figure 4. 7 1% Trimmed Dividend Payout % by Payer Type Current Payers Regular Payers 50Initiators Total Payers % Payout 45 40 35 30 25 20 1991 1993 1995 1997 1999 2001 Year 4. 4 Dividend issue Average dividend engender for all companies during the period 1991 to 2001 has declined from 1. 73% in 1991 to . 55 in 199 3 before finally recovering to 1. 61 in 1998 and again locomote marginally to 1. 24% in 2001 (Table 4. 10 and Figure 4. 8). On the whole the dividend pay off is range bound in the region of 0. 5% to 1. 73%. The reason for the fall in 1993 could be due to high increases in market capitalizations of a number of stocks in the face or irregularities in the stock market in 1992.Analysis of dividend yield by fictional character of payer shows that initiators have always paid higher levels of dividend yield compared to that of current payers and regular payers (Figure 4. 9, and Appendix Table A4. 23). Similarly current payers have paid higher dividend yield compared to that of regular payers. Dividend yields of initiators have declined from 6% in 1991 to 1. 51% in 1993 before recovering and reaching an all time high of 10% in 1998. Compared to this current payers yielded about 5% in 1992 before falling to 1. 81 in 1993 and have subsequently recovered and reached all time high of 8. 2% i n 2000. On the other hand regular payers started with a yield of close to 5% but have fallen to a low of 1. 5 in 1993 before reaching an all time high of 7. 76% in 2000. Table 4. 10 1% swiftness Trimmed Dividend Yield (%)During 1991 2001 Year Mean Median SD Firms 1991 1. 73 . 0 2. 74 1452 1992 1. 66 . 0 2. 57 1603 1993 0. 55 . 0 0. 94 1989 1994 1. 68 . 0 3. 02 2559 1995 1. 44 . 0 2. 85 3481 1996 1. 01 . 0 1. 88 4214 1997 1. 46 . 0 2. 99 4864 1998 1. 61 . 0 3. 80 5049 1999 1. 44 . 0 3. 86 5235 2000 1. 43 . 0 3. 96 5182 2001 1. 24 . 0 3. 15 4097 Note Median values are considered only up to 1 decimal.However, there are non-zero values. On the whole dividend yield of aggregate payers shows a significant increase from 1991 to 2001. 17 Average dividend yield has differed from industry to industry (Table 4. 11). Diversified firms, followed by firms in electricity, food and beverages and textiles industries paid higher dividend yields in 1991 while financial services and mining firms paid the lowest. By 2001 diversified firms and electricity continue to pay higher dividend yields where firms in transport industry have improved their dividend yields by 2001.However, food and beverages and textile firms recorded lowered their dividend yield by 2001, where as firms in financial services, and mining have improved their dividend yields. Figure 4. 8 1% Upper Trimmed Dividend Yield During 1991 2001 2. 0 1. 8 1. 6 1. 4 1. 2 1. 0 0. 8 0. 6 0. 4 0. 2 0. 0 1991 1993 1995 1997 1999 2001 Average (%) Year Figure 4. 9 1% Upper Trimmed Dividend Yield by Payer Type Current Payer 12 Initiator Regular Payer Total Average (%) 10 8 6 4 2 0 1991 1993 1995 1997 1999 2001 Year On the whole the dividend yield is range bound during the study period.Analysis of dividend yield by type of payer shows that initiators have always paid higher levels of dividend yield compared to that of current payers and regular payers. Diversified firms and firms in the electricity industry have paid higher divi dend yields during the study period. 4. 5 Summary of Analysis of Dividend Trends The number of firms paying dividend during the study period has shown an up trend till 1995 and has fallen subsequently. Average DPS on the other hand has shown a steady growth e xcept for year 2001. Average percentage PR showed a more stable pattern up to 1997 and then has shown a declining trend.Dividend yield measure is range bound. 18 Analysis also shows that only a few firms have consistently paid same levels of dividend. Analysis of dividend payout recurrence shows that very few firms have maintained the same payout for a longer period of time. Of the payers, regular payers have consistently paid higher payout as well as higher average dividend compared to that of current payers. Iinitiators have always paid higher levels of dividend yield compared to that of current payers and regular payers. Further, narrower indices protrude to have higher dividends compared to that of broader indices.Industry trends indicate that firms in the electricity, mining and diversified industries have paid higher dividends where as textile companies have paid less dividends. Firms in the machinery industry which includes computer hardware and software segments have shown lower dividends. Table 4. 11 Average Dividend Yield (%) Industry-Wise During 1991 2001 Industry Chemicals and Plastics Diversified Electricity Financial Services Food and Beverages Machinery Metals and Metal Product Mining Misc. Manufacturing Non-Metallic Mineral Products Other Services Textiles Transport Equipment 1991 1. 79 2. 97 2. 27 0. 2 2. 18 1. 66 1. 76 0. 11 1. 41 1. 4 1. 18 2. 06 1. 53 Average 1% Upper Trimmed Dividend Yield in Year 1992 1993 1994 1995 1996 1997 1998 1999 1. 92 0. 55 1. 68 1. 39 0. 99 1. 55 1. 91 1. 82 2. 49 0. 8 2. 64 1. 56 1. 3 2. 16 2. 44 2. 12 1. 31 0. 69 1. 49 1. 04 1. 14 1. 07 0. 93 0. 85 0. 9 0. 41 2. 28 1. 98 1. 45 1. 87 1. 29 1. 05 2. 06 0. 58 1. 4 0. 92 0. 7 1. 21 1. 63 1. 38 1. 55 0. 61 1. 8 1. 57 1. 07 1. 54 1. 87 1. 7 1. 81 0. 53 1. 62 1. 71 1. 15 1. 43 1. 33 1. 22 0. 05 0. 01 0. 02 0. 21 0. 52 0. 45 0. 56 1. 12 0. 98 0. 33 1. 51 1. 32 0. 89 1. 18 1. 35 1. 74 1. 55 0. 49 1. 15 1. 02 0. 86 1. 08 1. 36 1. 46 1. 37 0. 5 1. 33 1. 3 0. 81 1. 23 1. 33 0. 97 1. 8 0. 62 2. 08 1. 2 1 1. 41 1. 74 1. 48 1. 48 0. 55 1. 61 1. 36 1. 22 1. 97 2. 42 2. 24 2000 1. 66 2. 99 1. 47 1. 33 1. 12 1. 32 1. 29 0. 58 1. 34 1. 66 1. 05 1. 65 2. 76 2001 1. 35 2. 11 1. 99 1. 03 1. 06 1. 01 1. 2 0. 81 1. 29 1. 43 0. 98 1. 6 2. 04 4. 6 Changes in Tax Regime and Dividend Propensity Analysis of influence of change in tax regime on dividend propensity shows that total dividend per share has come down from an average of Rs. 0. 84 to Rs. 0. 71, where as average payout percentage has increased from 33. 33% to 51. 05% (Table 4. 12). Mimicking the trends for total firms, regular payers have registered lower DPS and higher payout percentage.As opposed to these changes over sub-periods of 3 years before an d after the change in tax regime, one year changes show that DPS has more or less remained at the same level, where as payout percentage has come down from 1997 to 1999. However, paired samples t-test shows that these differences are not statistically significant, except in the case of payout percentage from 1997 to 1999 (Table 4. 13). In sum, it can be inferred from the present study that tax regime changes have not very influenced the dividend behavior of Indian corporate firms and that the tradeoff theory does not hold true in the Indian context. 9 Average Dividends originally and subsequently the Tax Regime Change Variable Total DPS (in Total Firms Rs) Regular Payers Total DPS (in Rs. ) Immediate DPS (in Rs. ) Years Average Total Firms Payout % Average Regular Payers Payout % Immediate Payout % Years Sample After Before After Before 1999 1997 After Before After Before 1999 1997 Mean . 71 . 84 1. 55 1. 72 . 22 . 22 51. 05 33. 33 60. 53 38. 07 27. 78 35. 87 N 2597 2597 765 765 4848 4848 1217 1217 1000 1000 2987 2987 SE Correlation . 17 . 519 . 24 . 27 . 241 . 71 . 06 . 426 . 05 19. 19 . 015 1. 43 23. 35 . 008 1. 68 2. 65 . 072 2. 87 Sig. .000 . 000 . 000 . 610 . 795 . 00 Table 4. 12 Influence of Change in Tax Regime on Dividend Propensity Paired Samples T-test Difference SE After Before Total Firms -. 13 . 21 Total DPS Regular Payers -. 17 . 70 (in Rs. ) Immediate Years . 01 . 06 Total Firms 17. 72 19. 23 Average 22. 46 23. 39 Payout % Regular Payers Immediate Years -8. 09 3. 76 t -. 62 -. 24 . 11 . 92 . 96 -2. 15 df 2596 764 4847 1216 999 2986 Sig. .536 . 810 . 909 . 357 . 337 . 032 Table 4. 13 5. Characteristics of Dividend Payers and Non-Payers 5. 1 Profitability Payers on an average have more than twice the payoff on assets compared to that of non-payers (Table 5. 1).This finding is consistent with Fama and French (2001). Of the payers Initiators appear to have on an average higher payoff on assets compared to current payers and regular payers, thoug h their payoffs on assets have shown considerable fluctuations. Current payers and regular payers have similar levels of payoff on assets. Of the non-payers, former payers appear to have higher payoff on assets compared to firms, which never paid dividends. never paid in turn appears to higher payoff on assets compared to current non-payers. An analysis of EPS of payers and non-payers shows that the former have on an average higher EPS compared to the latter.The difference in magnitude is also quite substantial compared to that of payoff on assets. Of the payers, regular payers have consistently higher EPS compared to that of the other two groups of payers. EPS of current payers and initiators has shown considerable fluctuations over the sample period. Initiators have higher average EPS in the early part of 1990s and last few years of 1990s, where as in the intervening years their EPS has shown a decline. Current payers on the other hand shown an opposite trend compared to that of i nitiators.All the non-payer groups have shown considerable fluctuations in EPS during the sample period and on average registered a decline in EPS from 1990 to 2001. An analysis of common stock earnings to volume equity 20 shows that on an average payers have dominated non-payers as the former firms registered 24% in 1991 and 15% in 2001 to 4% and 6% by the latter in the corresponding years. Of the payers, initiators have higher common stock earnings to book equity compared to that of regular payers and current payers. Regular payers and current payers have similar equity earnings to book equity.However there is a gradual decline in earnings to book equity from 1991 to 2001. Of the non-payer firms, never paid firms appear to have higher equity earnings to book equity compared to current non-payers and former payers. The difference between payers and non-payers is larger in terms of stock earnings to book equity compared to payoff on firms assets. These findings are consistent with Fama and French. To sum up it can be concluded that profitability has positive influence on the dividend payment of a corporate firm. Dividend payers are more profitable compared to non-payers.Further, corporate firms in general and non-dividend payers in particular have become less profitable. 5. 2 Growth or Investment Opportunities An analysis of growth of assets shows that payers on an average have higher growth compared to that of non-payers. Payers have grown at percentages of 29. 03 in 1991, 23. 69 in 2000 and 10. 82 in 2001 compared to 18. 65, 4. 12 and 1. 86 in the corresponding years for non-payers. Of the payers initiators appear to have higher growth percentage compared to that of regular payers. Initiators have grown at percentages of 29. 87 in 1991, 49. 13 in 2000 and 57. 54 in 2001 compared to 28. 2, 23. 59 and 6. 78 in the corresponding years for regular payers. Regular payers in turn appear to have higher growth compared to that of current payers. Of the non-payers, never paid have on an average lower growth in assets compared to former payers and current payers. These findings are not consistent with Fama and French where they find never paid firms to have higher growth in assets compared to that of other non-payer and payer groups. Similar trends are observed with regard to growth opportunities as measured by R&038D investment to total assets. Payers appear to have higher growth opportunities compared to non-payers.Of the payers, regular payers have higher growth opportunities compared to initiators and current payers. Of the non-payers, never paid appears to have lower growth opportunities compared to current non-payers. However the percentage growth opportunities for payers as well as for non-payers are considerably low as the payers on an average have 0. 02% in 1991 and 0. 27% in 2001 compared to 0. 003% and 0. 0447% in the corresponding years for non-payers. An analysis of aggregate market value to book value of assets shows that payers a nd non-payers do not differ significantly.However, there are differences with in the payer and non-payer groups. For instance, initiators appear to have higher market value to book value compared to regular and current payers, where as in non-payer group, former payers appear to be dominated by both never paid and current non-payers. On the whole in the Indian context higher growth and growth opportunities have not resulted in lower dividend payments by corporate firms. This finding contradicts the findings of Fama and French, whereby they contend that growth opportunities are an important reason for reduced dividend payments by firms. . 3 Size Dividend payers appear to be much larger in size compared to that of non-payers. This observation is consistent with Fama and French (2001). Average size as measured by assets of payers averaged Rs. 104. 4 crore in 1991 and Rs. 1413. 43 in 2001 compared to that of Rs. 56. 92 and Rs. 181. 20 in the corresponding years for non-payers. 21 Of the payers, regular payers have higher assets compared to that of current payers. Current payers in turn have higher assets compared to initiators. Similarly, regular payers have grown an average asset base of Rs. 112 crore in 1991 to Rs. 711 crore in 2001 compared to Rs. 54. 71 crore and Rs. 581. 48 core for initiators and Rs. 47. 11 crore in 1992 and Rs. 654. 9 crore for current payers. Of the non-payers, former payers appear to have higher assets compared to current never paid who in turn have higher asset base compared to current non-payers. Asset base of former payers has grown from Rs. 90. 14 crore in 1991 to Rs. 239. 2 crore in 2001 while in the corresponding period never paid have grown from Rs. 51. 69 crore to Rs. 80. 57 crore. However, current non-payers have registered a decline in their asset base from Rs. 3. 5 crore to Rs. 18. 73 crore during the same period. An analysis of indebtedness of firms s hows that non-payers appear to have higher levels of long-term borrowings to assets compared to that of payers. Of the non-payers, never paid appears to have higher longterm borrowings to assets compared to former payers, who in turn appear to have higher levels compared to current non-payers. Of the payers, regular payers appear to have higher long-term borrowings to assets compared to current payers. Current payers in turn have higher levels compared to initiators.On the whole, the size of assets of firms have at rest(p) up during the period 1990 2001 and that increased assets seems to have been financed through long-term borrowing implying pecking order of preference for funds. Table 5. 1 Characteristics of Dividend Payers and Non-Payers Year 1991 1992 1993 Average % issue on Assets Current Payers 11. 20 12. 23 Initiators 9. 79 15. 15 12. 57 Regular Payers 11. 69 12. 03 12. 00 Total Payers 11. 44 12. 32 12. 07 Current Non-Payers 6. 58 5. 16 3. 69 motive Payers 10. 24 7. 41 6. 23 never Paid 4. 44 6. 71 5. 29 Total Non-Payers 5. 49 6. 68 5. 29 Average 1 % Trimmed EPS Current Payers 3. 0 4. 83 Initiators 7. 05 7. 47 5. 49 Regular Payers 14. 11 12. 79 9. 07 Total Payers 13. 20 11. 97 8. 46 Current Non-Payers -1. 61 -1. 18 -0. 49 Former Payers 0. 71 -2. 72 -3. 45 never Paid 0. 07 1. 41 -0. 88 Total Non-Payers 0. 04 0. 49 -1. 41 Average Common Stock lolly to Book Equity % Current Payers 21 18 Initiators 29 39 27 Regular Payers 22 20 19 Total Payers 24 24 21 Current Non-Payers -15 -7 -41 Former Payers 8 -27 58 Never Paid 14 23 47 Total Non-Payers 4 13 23 Average % Growth (Assets) Current Payers 46. 25 27. 29 Initiators 29. 87 92. 24 66. 77 Regular Payers 28. 92 62. 44 32. 20 Total Payers 29. 03 63. 66 33. 0 Current Non-Payers 16. 13 2. 34 26. 55 1994 12. 67 15. 19 12. 24 12. 58 3. 16 5. 37 4. 91 4. 79 7. 30 4. 53 9. 37 8. 67 -0. 35 -1. 64 -0. 62 -0. 81 23 32 21 24 13 72 14 21 27. 95 50. 41 36. 31 36. 17 46. 48 1995 13. 99 13. 66 12. 21 12. 56 1. 99 5. 94 5. 73 5. 41 6. 95 3. 98 8. 90 8. 15 0. 28 0. 51 0. 59 0. 54 20 26 22 23 4 -65 10 -3 1996 12. 27 11. 25 12. 02 11. 99 3. 67 9. 06 3. 89 5. 61

Modernist Poetry Doesnt Communicate With Society English Literature Essay

Modernist poets, or in that pattern all modernists minds, philosophers and creative persons, ignores the societal order to almost expiration. They do non do any effort to speak to or pass on with the nine, hardly really revolutionises the thought of art in the domain of the societal thoughts. In simpler words, Modernist philosophers do non follow the society, like its predecessors and it inquiries the easy accepted truth of the doddering age.In the deeply 19th century, in the after(prenominal)math of the to the full industrialise western uni poetry with its new economic, societal and political construction, traditional projection and reading of art and civilization lost at least some of its here and nowance. Following the old norms was nil but a return of what has already been talked of and achieved for the poets, minds and creative persons. To accomplish some matter new, they had to rehearse a signifier which was more tell apart and yet obscure in its look. But that neve rtheless do non answer the point of our intervention as to how or why the deficiency of communicativeness in the midst of the poet and the reader occurs in the 19th century western uni write.With the popularity of the printing imperativeness, writings was no longer confined to the higher strata of the society. With this development in the chronicle of printing, writers and poets found themselves traveling off from their audience. The opportunity or the impulse to interact straight with the multitudes decreased with the flow of clip until the clip when there is no effort to speak to or pass on with the society. The modernist poet ever lives in isolation from the existent unipoesy while seeking to convey his/her personise points of position. But for the reader, the same verse direct can keep antithetical reading at different clip and infinite. For case Emily Dickinson, the modernist American poet, promulgated less than a twelve of her about 18 100 verse forms during her life -time. It was only when after 1886, after her decease, when her cache of verse forms were discovered by her younger sister Lavinia, that the comprehensiveness of Emily Dickinson s verse form became evident.Emily Dickinson, merely like the other modernist poets, was alienated from the society. As a poet she could nt associate to the community, she was populating in, and the society in bend could nt associate to her verse forms, when they were published. Hence, during her life-time, the few verse forms which were published were to a great extent edited and altered harmonizing to the caprices and wants of the publishing signboard in order to model them in regard to the bing societal norms.Dickinson was obsess by death and has immortalised the construct of death in her poesy. In angiotensin-converting enzyme of her ignoble verse form, she seemed to hold related with death and to some extent has personified the construct. BECAUSE I could non halt for Death,He kindly stopped for me The passenger railcar held but merely ourselvesAnd Immortality. ( Dickinson )The imagination that has been projected through the above mentioned Dickinson s verse form is unconventional and to some extent radical. In the late 19th century America, fewer poets would ve showed the bravery to oppugn the conventional beliefs babble out life and death . Harmonizing to the above mentioned business lines, death to her is immortal . In some other verse form she states, I DIED for beauty, but was scarceAdjusted in the grave,When 1 who died for truth was lainIn an adjoining room.He questioned quietly why I failed? For beauty, I replied. And I for truth, -the two are one We brethren are, he said.And so, as kinsmen met a sinfulness,We talked between the room,Until the moss had reached our lips,And covered up our names.( Dickinson )The imagination that is produced by the verse form is quite unconventional. Death has been beautified, glorified and celebrated by the poet in above menti oned verse form. Death has been a really of import subject for the modernist poets. Through their daring symbolism and representation of thoughts, subjects like depression, devastation, colliery and decease has ever been a really popular point of treatment among the modernist poets like Robert Frost, T.S. Elliot and of class Emily Dickinson. In T.S. Elliot s The Hollow Men , the poet concludes the verse form by saying, This is the musical mode the universe endsThis is the manner the universe endsThis is the manner the universe endsNot with a knock but a whine. ( Elliot )To the modernist poets, the severeness of the existent universe was intolerable and hence from an stray infinite, the poet represents the inhuman treatment of the existent universe through his/her ain linguistic communication, non seeking to germinate everything. The reading nevertheless is left entirely on the reader and the poet does non stock-still do an attempt to link with the readership or the society.M odernity can be said to unify all world in a at odds(p) integrity of disunity. Harmonizing to Marshall Berman, It pours us into a whirlpool of ageless radioactive decay and reclamation of battle and contradiction, of am epicuity and torment. To be modern is to be a portion of a existence in which, as Marx said, all that is steadfast thaws into air. ( Berman ) . Modern authors have agreed to the fact that the lone unafraid thing about modernness is its insecurity. The lines of W.B. Yeats The consequence Coming resonates a similar sense, Thingss evanesce apart the Centre can non keep mere(prenominal) lawlessness is loosed upon the universe, ( Yeats )The issue and the delicate nature of the age is possibly the most popular line of reading for the above two lines. The ideas of the Enlightenment minds, to cultivate nonsubjective scientific discipline, corporate morality and jurisprudence, were drawn to roll up with the cognition of many a(prenominal) single free minds, to develop the miscellaneous doctrine of human way out and the enrichment of the twenty-four hours to twenty-four hours life. Science and Technology promised an age devoid of scarceness and want. Rational signifiers of societal apprehension erased the bing unreasons of myth, phantasy, faith and superstitious notion. Traditional nonliteral representation of the word was re rigid by a more obscure imagination, which each and every reader can visualise harmonizing to his/her apprehension of the word . Surrealism, dada and Cubism became a portion of the bigger image of Modernist art, literature and poesy.In some other verse form of Emily Dickinson, she states, Fame is a bee.It has a song-It has a sting-Ah, excessively, it has a wing. ( Dickinson )hither fame is compared with a bee , an unconventional representation merely as Charles Baudelaire compares flowers with evil in Fleur du Mal ( Flowers of Evil ) . These metaphoric representations of the word was new to the age and was absent in the old enlightened western age of literature and art.A individual line which possibly can be the easiest guide line of looking at at modernist poesy is expressed by Archibald MacLeish in his Ars Poetica , A verse form should non intend, but be . ( MacLeish ) . The primary difference between a wild-eyed text and a Modernist text is that a Modernist text imitates guesss and readings. The elans after each line of Emily Dickinson s verse forms are perchance placed to supply the reader a infinite for contemplation and retrospection. A Romantic text, on the other manus, invites battle. Emily Dickinson s Fame is a bee is a verse form that may look simple and shallow, but if one Judgess the construct of renown in the late 19th century, he/she is bound to look up to the simpleness of the technique in which the blunt passing nature and the frailties of glory is projected through the seemingly showy and musical drape of popularity. The Second Coming by W.B. Yeats is a nother fantastic work of Modernist poesy. The poet uses a dark scene to specify a clip when the universe is near a disclosure. The verse form depends on the cognition of a certain Christian belief. It is a antic look of the clip in which it was written. It provides us with a image of the First World War in Europe where, Mere lawlessness is loosed upon the universe. Stuning imagination of terrorizing linguistic communication, where poesy is no more depended on linguistic communication, but linguistic communication comes out of poesy. Yeats womb-to-tomb bewitchment of the supernatural and occult was lyrically manifested in this verse form. The significance of the gyre is an equivocal one. It can be a historical period or the psychological stages of an person s development. The personal imagination of the gyre insinuates at the Hegelian construct of coiling history. The verse form is really in loose iambic pentameter, really much closer to the free poetry. The rhyme is haphazar d. These dogmas were the trumpeters of the coming of Modernist poesy.In modernist poesy, the several poet does non care to explicate or construe their ain verse forms. It is something prohibited for them. The distance between the reader and the poet is big and there is no effort nevertheless to pass on between the two.