DECLARATION I Rahul Chawla, Roll No 1173/11, MBA (Semester-IV) of the Tilak Raj Chadha Institute of Management and Technology,

Yamuna Nagar hereby declare that the Research Report entitled To Study the Impact of Dividend Announcement On Stock Market Return with Special Reference to Companies Listed On BSE100 (TCS, Reliance, Coal India) has been an original work and the same has not been submitted to any other institute for the award of any other degree.

(RAHUL CHAWLA)

ACKNOWLEDGEMENT
Gratitude is hardest of emotions to express and often does not find adequate words to convey what one feels. The researcher is extremely grateful to TIMT, Yamuna Nagar for giving her the opportunity to conduct the research and the help provided to complete the research report. At the outset, the researcher would take this excellent opportunity to render his sincere gratitude to Dr. Vikas Daryal, Director, TIMT, Yamuna Nagar for his kind assistance in the successful completion of the synopsis. The researcher pays his hearty thanks to Mrs. Vandana Madaan, H.O.D, TIMT, and Yamuna Nagar for her pinpoint guidance. Her enthusiastic collaboration with sustained interest made it possible to undertake and complete this project. He is very thankful to his mentor, Ms. Madhuri Gupta, Assistant Professor, TIMT, Yamuna Nagar for her full cooperation and support where and when needed during the research. The deepest gratitude is also expressed to all those persons who supported the researcher all through the project and has left a long lasting impression that will influences the project and his behaviour for all times to come.

EXECUTIVE SUMMARY
An index is used to give information about the price movements of products in the financial, commodities or any other markets. Financial indexes are constructed to measure price movements of stock, bonds, T-bills and other forms of investments. Stock market indexes are meant to capture the overall behaviour of equity markets. A stock market index is created by selecting a group of stocks that are representative of the whole market or a specific sector or segment of the market. An index is calculated with reference to base period and base index. The intended research on To Study the Impact of Dividend Announcement On Stock Market Return with Special Reference to Company Listed On BSE100 (TCS, Reliance, Coal India) has to be submit. The study will be conducted with the objective of finding out the impact of Dividend announcement on Stock Market Return. The research will be Descriptive in nature as it tends to gain familiarity with a phenomenon or to achieve new insights into it. Study setting is Non-contrived because the study will be conducted with no interference of research. It is a Cross sectional study as data will be collected at one particular time. The data will be collected by researcher through secondary data. The hypothesis testing for the difference between the means of two samples will be conducted. To test the hypothesis t-test will be applied. Various tools and models like correlation, regression and impulse response will applied to analyze the data. Some limitations can be occurring in the study like time constraint, complex calculation, resource constraint, wide area of study.

CONTENTS

Introduction a. Company Profile b. Topic Theoretical Frame work a. Construct b. Independent and Dependent Variables Literature Review Research Objective Research Methodology a. Research design

Type of Research Design Time Horizon Study Setting Flow Chart for solution of Statistical Tools

i. Hypothesis Development & testing ii. Sample and Sample design iii. Data collection iv. Analytical Tools v. Statistical tools vi. Limitations of Study Data Analysis Result and Finding

 Policy Implications Recommendations Bibliography Annexure

BOMBAY STOCK EXCHANGE (BSE)

INTRODUCTION TO BSE The Bombay Stock Exchange Limited (formerly, The Stock Exchange, Mumbai; popularly called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia. It is located at Dalal Street, Mumbai, India.

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage. It is the first stock exchange in the country to obtain permanent recognition in 1956 from the Government of India under the Securities Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized and its index, SENSEX, is tracked worldwide. Earlier an Association of Persons (AOP), the Exchange is now a demutualised and corporatised entity incorporated under the provisions of the Companies Act, 1956, pursuant to the

BSE(Corporatisation and Demutualisation) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI).

BSE 100 Curr. val(Rs.) 1,288.1 0 773.10 358.00 286.40 251.10 669.50 2,089.7 0 2,376.0 0 159.50 778.45 1,025.3 5 529.65

Company TCS Reliance Inds. Coal India ITC ONGC HDFC Bank St Bk of India Infosys NTPC HDFC ICICI Bank Hind. Unilever

Chg(%) MCap(Cr) 0.78 0.89 0.92 -0.88 -0.04 0.04 -0.47 -0.37 -2.57 0.39 -0.74 1.04 252,106.93 249,873.65 226,125.69 225,428.30 214,828.10 158,243.02 140,227.23 136,439.42 131,515.09 119,924.11 118,229.01 117,317.48

Company Profile
On the basis of BSE 100 index Market Capitalization Companies selected are:

Tata Consultancy Services Limited Tata Consultancy Services Limited (TCS) is the world-leading information technology consulting, services, and business process outsourcing organization that envisioned and pioneered the adoption of the flexible global business practices that today enable companies to operate more efficiently and produce more value. TCS commenced operations in 1968, when the IT services industry didnt exist as it does today. Now, with a presence in 34 countries across 6 continents, & a comprehensive range of services across diverse industries, we are one of the world's leading Information Technology companies. Six of the Fortune top 10 companies are among our valued customers. TCS are part of one of Asia's largest conglomerates - the TATA Group - which, with its interests in Energy, Telecommunications, Financial Services, Chemicals, Engineering & Materials, provides us with a grounded understanding of specific business challenges facing global companies. Culture

At TCS we have an energetic and open workplace environment, and a collaborative culture that's based on teamwork. Pulling together is a central tenet of our work ethic. Energetic and full of enthusiasm, we enjoy our day (and night) at work. Life at TCS is a stimulating and exciting experience. Not only do our offices have the best infrastructure and technology, our colleagues have a knack of working hard and partying harder. TCS is an equal-opportunity employer and TCS come from many nationalities and speak many languages. And, since we believe in celebrating everything under the sun, you will find us singing carols at Christmas and doing the dandiya dance at Navrathri with equal enthusiasm. Services and solutions TCS is a leading IT services provider, with a wide breadth of services across the entire Information technology spectrum. To know more about how TCS can help you identify opportunities of improvement, build the roadmap to getting there & leverage technology to make it possible, read more about our services & solutions: Consulting. IT Services. BPO. IT Infrastructure Services. Engineering and Industrial Services. Product Based Solutions. Product TCS products are popular all over the world. They are known to be user-friendly, flexible, comprehensive, and trailblazers in their respective areas

Banking. Accounting. Insurance. Financial Services. E Security.

 Manufacturing. Life Sciences and Healthcare. Tools. S-Governance. Energy & Utilities.

Reliance
Reliance Industries Limited (RIL) is Indias largest private sector company on all major financial parameters. It has emerged as the only Indian company in the list of global companies that create most value for their shareholders, published by Financial Times based on a global survey and research conducted by PricewaterhouseCoopers in 2004. RIL features in the Forbes Global list of worlds 400 best big companies and in FT Global 500 list of worlds largest companies. Reliance Infocomm is the outcome of late Dhirubhai Ambanis dream of bringing about a digital revolution in India that will bring to every Indians doorstep an affordable means of information and communication. "Make the tools of infocomm available to people at an affordable cost. They will overcome the handicaps of illiteracy and lack of mobility", was how Dhirubhai, as he was fondly called, spelt out Reliance Infocomms mission in late 1999. He firmly believed the country could use information and communication technology to overcome its backwardness and underdevelopment. The Company from time to time seeks to further diversify into other industries. The Company now has operations that span from the exploration and production of oil and gas to the manufacture of petroleum products, polyester products, polyester

intermediates, plastics, polymer intermediates, chemicals and synthetic textiles and fabrics. The Company's operations can be classified into four segments namely: Petroleum Refining and Marketing business Petrochemicals business Oil and Gas Exploration & Production business Others

The Company is: Largest producer of Polyester Fibre and Yarn 5th largest producer of Paraxylene (PX) 5th largest producer of Polypropylene (PP) 8th largest producer of Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG) COAL INDIA With the Government's national energy policy the near total national control of coal mines in India took place in two stages in 1970s. The Coking Coal Mines (Emergency Provisions) Act 1971 was promulgated by Government on 16 October 1971 under which except the captive mines of IISCO, TISCO, and DVC, the Government of India took over the management of all 226 coking coal mines and nationalised them on 1 May, 1972. Bharat Coking Coal Limited was thus born. Further by promulgation of Coal Mines (Taking over of Management) Ordinance 1973 on 31 January 1973 the Central Government took over the management of all 711 non-coking coal mines. In the next phase of nationalization these mines were nationalized with effect from 1 May 1973 and

a public sector company named Coal Mines Authority Limited (CMAL) was formed to manage these non coking mines. Corporate Structure and Subsidiary Companies Coal India is a holding company with seven wholly owned coal producing subsidiary companies and one mine planning & Consultancy Company. It encompasses the whole gamut of identification of coal reserves, detailed exploration followed by design and implementation and optimizing operations for coal extraction in its mines. The producing companies are: 1. Eastern Coalfields Limited (ECL), Sanctoria, West Bengal 2. Bharat Coking Coal Limited (BCCL), Dhanbad, Jharkhand 3. Central Coalfields Limited (CCL), Ranchi, Jharkhand 4. South Eastern Coalfields Limited (SECL), Bilaspur, Chattisgarh 5. Western Coalfields Limited (WCL), Nagpur, Maharashtra 6. Northern Coalfields Limited (NCL), Singrauli, Madhya Pradesh 7. Mahanadi Coalfields Limtied (MCL), Sambalpur, Orissa 8. Coal India Africana Limitada, Mozambique 9. The consultancy company is Central Mine Planning and Design Institute Limited (CMPDIL), Ranchi, Jharkhand. North Eastern Coalfields (NEC) a small coal producing unit operating in Margherita, Assam is under direct operational control of CIL. Coal India's major consumers are Power and Steel sectors. Others include Cement, Fertiliser, Brick Kilns, and small scale industries.

INTRODUCTION Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be distributed to shareholders. There are two ways to distribute cash to shareholders: share repurchases or dividends. Many corporations retain a portion of their earnings and pay the remainder as a dividend. A dividend is allocated as a fixed amount per share. Therefore, a shareholder receives a dividend in proportion to their shareholding. For the joint stock company, paying dividends is not an expense; rather, it is the division of after tax profits among shareholders. Retained earnings (profits that have not been distributed as dividends) are shown in the shareholder equity section in the company's balance sheet - the same as its issued share capital.

Public companies usually pay dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special dividend to distinguish it from Dividends are usually paid in the form of cash, store credits (common among retail consumers' cooperatives) and shares in the company (either newly created shares or existing shares bought in the market.) Further, many public companies offer dividend reinvestment plans, which automatically use the cash dividend to purchase additional shares for the shareholder. Dividend policy is concerned with taking a decision regarding paying cash dividend in the present or paying an increased dividend at a later stage. The firm could also pay in the form of stock dividends which unlike cash dividends do not provide liquidity to the investors; however, it ensures capital gains to the stockholders. The expectations of dividends by shareholders helps them determine the share value, therefore, dividend policy is a significant decision taken by the financial managers of any company investors don't really choose between future gains and cash dividends.

FACTORS AFFECTING DIVIDEND ANNOUNCEMENT 1. Stability of Earnings. The nature of business has an important bearing on the dividend policy. Industrial units having stability of earnings may formulate a more consistent dividend policy than those having an uneven flow of incomes because they can predict easily their savings and earnings. Usually, enterprises dealing in necessities suffer less from oscillating earnings than those dealing in luxuries or fancy goods. 2. Age of corporation. Age of the corporation counts much in deciding the dividend policy. A newly established company may require much of its earnings for expansion and plant improvement and may adopt a rigid dividend policy while, on the other hand, an older company can formulate a clear cut and more consistent policy regarding dividend. 3. Liquidity of Funds. Availability of cash and sound financial position is also an important factor in dividend decisions. A dividend represents a cash outflow, the greater the funds and the liquidity of the firm the better the ability to pay dividend. The liquidity of a firm depends very much on the investment and financial decisions of the firm which in turn determines the rate of expansion and the manner of financing. If cash position is weak, stock dividend will be distributed and if cash position is good, company can distribute the cash dividend. 4. Extent of share Distribution. Nature of ownership also affects the dividend decisions. A closely held company is likely to get the assent of the shareholders for the suspension of dividend or for following a conservative dividend policy. On the other hand, a company having a good number of shareholders widely distributed and forming low or medium income group, would face a great difficulty in securing such assent because they will emphasise to distribute higher dividend. 5. Needs for Additional Capital. Companies retain a part of their profits for strengthening their financial position. The income may be conserved for meeting the increased requirements of working capital or of future expansion. Small companies usually find difficulties in raising finance for their needs of increased working capital for expansion programmes. They having no other alternative, use their ploughed back profits. Thus, such

Companies distribute dividend at low rates and retain a big part of profits. 6. Trade Cycles. Business cycles also exercise influence upon dividend Policy. Dividend policy is adjusted according to the business oscillations. During the boom, prudent management creates food reserves for contingencies which follow the inflationary period. Higher rates of dividend can be used as a tool for marketing the securities in an otherwise depressed market. The financial solvency can be proved and maintained by the companies in dull years if the adequate reserves have been built up. 7. Government Policies. The earnings capacity of the enterprise is widely affected by the change in fiscal, industrial, labour, control and other government policies. Sometimes government restricts the distribution of dividend beyond a certain percentage in a particular industry or in all spheres of business activity as was done in emergency. The dividend policy has to be modified or formulated accordingly in those enterprises. 8. Taxation Policy. High taxation reduces the earnings of he companies and consequently the rate of dividend is lowered down. Sometimes government levies dividend-tax of distribution of dividend beyond a certain limit. It also affects the capital formation. N India, dividends beyond 10 % of paid-up capital are subject to dividend tax at 7.5 %. 9. Legal Requirements. In deciding on the dividend, the directors take the legal requirements too into consideration. In order to protect the interests of creditors an outsider, the companies Act 1956 prescribes certain guidelines in respect of the distribution and payment of dividend. Moreover, a company is required to provide for depreciation on its fixed and tangible assets before declaring dividend on shares. It proposes that Dividend should not be distributed out of capita, in any case. Likewise, contractual obligation should also be fulfilled, for example, payment of dividend on preference shares in priority over ordinary dividend. 10. Past dividend Rates. While formulating the Dividend Policy, the directors must keep in mind the dividend paid in past years. The current rate should be around the average past rat. If it has been abnormally increased the shares will be subjected to speculation. In a new concern, the company should consider the dividend policy of the rival organisation.

11. Ability to Borrow. Well established and large firms have better access to the capital market than the new Companies and may borrow funds from the external sources if there arises any need. Such Companies may have a better dividend pay-out ratio. Whereas smaller firms have to depend on their internal sources and therefore they will have to built up good reserves by reducing the dividend payout ratio for meeting any obligation requiring heavy funds. 12. Policy of Control. Policy of control is another determining factor is so far as dividends are concerned. If the directors want to have control on company, they would not like to add new shareholders and therefore, declare a dividend at low rate. Because by adding new shareholders they fear dilution of control and diversion of policies and programmes of the existing management. So they prefer to meet the needs through retained earnings. 13. Repayments of Loan. A company having loan indebtedness are vowed to a high rate of retention earnings, unless one other arrangements are made for the redemption of debt on maturity. It will naturally lower down the rate of dividend. Sometimes, the lenders (mostly institutional lenders) put restrictions on the dividend distribution still such time their loan is outstanding. Formal loan contracts generally provide a certain standard of liquidity and solvency to be maintained. Management is bound to hour such restrictions and to limit the rate of dividend payout. 14. Time for Payment of Dividend. When should the dividend be paid is another consideration. Payment of dividend means outflow of cash. It is, therefore, desirable to distribute dividend at a time when is least needed by the company because there are peak times as well as lean periods of expenditure. Wise management should plan the payment of dividend in such a manner that there is no cash outflow at a time when the undertaking is already in need of urgent finances. 15. Regularity and stability in Dividend Payment. Dividends should be paid regularly because each investor is interested in the regular payment of dividend. The management should, in spite of regular payment of dividend, consider that the rate of dividend should be all the most constant. For this purpose sometimes companies maintain dividend equalization Fund.

THEORETICAL FRAMEWORK

CONSTRUCT: - To study the impact of Dividend Announcement on Stock Market Return. Dependent variables: Stock Market Return

Independent variables: Dividend Announcement

LITERATURE REVIEW Empirical literature:Empirical literature consists of study made by other in the same field. The published data in Newspapers, Books & Magazines available for discussion with people of organization. BOOKS: Dr. P Periasamy, (2nd Edition), Financial Management, this book referred to study the factor affecting of dividend announcement. R.K. Mittal , (Edition-6th) ,Management Accounting & Financial Management. This book is referred for understanding the basic concept of dividend policy and approaches to dividend decisions. D.K Goel, Rajesh Goel and Shelly Goel, (7th Revised Edition), Management Accounting and Finance Management.- The information about the different types of Ratios like liquidity ratio, profitability ratio etc. Sekran Uma, (Edition 4th) , Research Methods for Business: This book helps in getting the information about the study setting of the research. Prasanna Chandra, (7th Edition) ,Financial Management, This book is referred to study the dividend policy. Pandey I.M., (Edition-3rd) ,Financial Management.- This book gives the information about the various dividend policy theories such as MM Approach etc. Nargundkar Rajendra, (Edition-3rd ) , Marketing Research: The book helped in understanding the different sampling techniques used here. Cooper R. Donald, (Edition-8th), Business Research Methods. The various type of research design and the other concepts of research methodology are studied from this book. Kothari C.R., (II Revised Edition), Research Methodology Methods and Techniques. Gives information regarding the basics of research and research methodology, what are the different types of research designs, what is problem

statement, what are the sources of data collection and what are the methods of data collection is given in this section. James C. Van Horne, (Edition 11th), Financial Management Policy. The information regarding financial ratio analysis is studied from this book. Gupta Shashi K. and Sharma R. K., (Edition-6th), Management Accounting. This book is referred to know about the leverages. D.K Goel, Rajesh Goel and Shelly Goel , (7th Revised Edition), Management Accounting and Finance Management, This book gives the information about model of dividend policy. A.K. Vashisht and J.S. Pasricha, Management Accounting , This book gives the information about kinds of dividend policy. Jain T.R. and Aggarwal S.C., (Edition-3rd), Statistics for MBA.- This gives information about how to find the values of Correlations, Regression, Hypothesis and Trend analysis. Bhalla V.K , (Edition-9th) ,Working capital management. This book helps in knowing about profitability and liquidity. JOURNALS: MUKESH BAJAJ and ANAND M. VIJH0,(March 1995) Trading Behavior and the Unbiasedness of the Market Reaction to Dividend Announcements the journal of finance-Researcher studied about the M M approach of dividend policy. Solanki Ashvin H.,(Aug. 2012) An Empirical Study of Corporate Dividend Policy Advances In Management- Researcher studied about the objective and finding of dividend policy. Renuka Sharma, (September 2011) Stock Price Behaviour around Dividend Announcements: An Event Study Methodology Journal of Management- Researcher studied about the dividend policy and market model. T. Mallikarjunappa & T . Manjunatha, (July-December 2009) Stock Price Reactions to Dividend Announcements Journal of Management & Public PolicyResearcher studied about the model and the hypothesis development.

Dar-Hsin Chen, Hsiang-Hsi Liu, and Cheng-Ting Huang,( janfeb 2009) The Announcement Effect of Cash Dividend Changes on Share Prices chinese economyResearcher studied about the dividend policy and dividend payout ratio.

Sahu, chinmoy ,(2000) , empirical test of association between dividend payout and stock return, paradigm- Researcher has studied about the association between dividend payout and stock return.

Suman Banerjee, Vladimir A, Gatchev, and Paul A, Spind , (June 2007) Stock Market Liquidity and Firm Dividend Policy, Journal of financial- Researcher has studied about the association between dividend policy and stock market liquidity of the firm.

HASSAN ALISINAEI, LEILA HABIBI(February 2012), An investigation of factors relevant to payout ratio in listed firms on the tehran stock exchange International Journal of Multidisciplinary Management Studies , studied about the various dividend policies followed by the firm. Researcher has

WEBSITES: http://www.vyoms.com/company-profiles/tcs.asp This website gave me the information about TCS company profile and products. http://www.ril.com/html/aboutus/about_brands.html This website gave me the information about the Reliance Company and its products. http://www.coalindia.in/Company.aspx?tab=0 This website gave me the information about Coal India. http://www.xlstat.com/demo_pca.htm33: this website gave me information about tools. http://www.spss.com/corpinfo/fags.htm38: this website gave me information about spss. http://www.moneycontrol.com/india/stockpricequote/computers-software/tataconsultancy-services/TCS : this website gave me information about TCS share price. http://www.moneycontrol.com/india/stockpricequote/diversified/relianceindustries/RI : this website gave me information about Reliance share price.

RESEARCH OBJECTIVES
1. To Analyse the impact of Dividend Announcement on Stock Market Return in the pre and post period Announcement of dividends. 2. To examine the Market reaction to Dividend information. 3. To check whether the markets are efficient when any news about dividend announcement decisions of a company is received. 4. To determine the volatility in share price of TCS, Reliance and Coal India

RESEARCH METHODOLOGY
Research is defined as a scientific & systematic search for pertinent information on a specific topic. Research is an art of scientific investigation. Research is a systemized effort to gain new knowledge. It is a careful inquiry especially through search for new facts in any branch of knowledge. The search for knowledge through objective and systematic method of finding solution to a problem is a research.
1 OBSERVATION Broad area of research interest identified 3 PROBLEM DEFINITION Research Problem Delineated

4 THEORETICAL FRAMEWORK

5 GENERATION OF HYPOTHESES

6 SCIENTIFIC RESEARCH DESIGN

7 DATA COLLECTION, ANALYSIS AND INTERPRETATION

2 PRELIMINARY DATA GATHERING Interviewing Literature Survey

Variables clearly identified and labelled

NO

Yes

8 DEDUCTION Hypotheses substantiated? Research question answered?

9 Report writing

10 Report Presentat ion

11 Managerial decision making

So we should consider the following steps in research methodology: Meaning of research2 Problem statement2 Research design1

Sample design Data collection2 Analysis and Interpretation of data

MEANING OF RESEARCH2 Research is defined as a scientific & systematic search for pertinent information on a specific topic. Research is an art of scientific investigation. Research is a systemized effort to gain new knowledge. It is a careful inquiry especially through search for new facts in any branch of knowledge. The search for knowledge through objective and systematic method of finding solution to a problem is a research PROBLEM STATEMENT2 The research problems, in general refers to some difficulty with a researcher experience in the contest of either a particular a theoretical situation and want to obtain a solution for same. The present project has been undertaken To studying the Impact of Inventory in terms of Cost of holding inventory, Cost of Goods sold, Stock of work in Progress & Stock of Raw Material on Profitability (Net Profit) of Hindustan Dorr Oliver Limited (2006-2011) RESEARCH DESIGN1 A research is the arrangement of the conditions for the collections and analysis of the data in a manner that aims to combine relevance to the research purpose with economy in procedure. In fact, the research design is the conceptual structure within which research is conducted; it constitutes the blue print of the collection, measurement and analysis of the data. The design in such studies must be rigid and not flexible and most focus attention on the following; o What is the study about? o Why is the study being made? o Where will the study be carried out? o What type of data is required? o Where can be required data be found? o What period of time will the study include? o What will be sample design? o What techniques of data collection will be used? o How will the data be analyzed?

RESEARCH DESIGN CAN BE CATEGORIZED AS: 1

The present study is Descriptive in nature, as it seeks to discover ideas and insight to bring out new relationship. Research design is flexible enough to provide opportunity for considering different aspects of problem under study. It helps in bringing into focus some inherent weakness in enterprise regarding which in depth study can be conducted by management.

Time Horizon:

The time horizon for my study is Cross Sectional ,the four years time period.

STUDY SETTING:

This includes field study and lab experiment. My study is using Non Contrived as in same natural environment/data.

Purpose of Study:

The purpose of my study is Descriptive. A descriptive study is undertaken in order to ascertain be able to describe the characteristics of variables of interest in a situation. It is also Hypothesis testing also. Because studies that engage in hypothesis testing usually explain the nature of certain relationship or establish the difference among groups or independence of the two or more factors in the situation.

Measurements and scaling:

A. Operational definition

B. Items (measures) C. Scaling D. Categorization E. Coding

FLOW CHART FOR SELECTION OF STASTICAL TOOLS

HYPOTHESIS DEVELOPMENT AND TESTING16

HYPOTHESIS DEVELOPMENT There are two types of hypothesis : Null hypothesis Alternative hypothesis

Null hypothesis (H0): In test of hypothesis we always begin with an assumption or hypothesis this is called null hypothesis. The null hypothesis asserts that there is no significant difference between the sample static and the population parameter and whatever the observed difference is there, is merely due to fluctuations in sampling from same population. Alternative hypothesis (H1): Any hypothesis different then the null hypothesis is called an alternative hypothesis. The two hypothesis H0 & H1 are such that if one is accepted, the other is rejected.

T-test
T-test is a small sample test. It was developed by William Gosset in 1908. He published this test under the pen name of Student. Therefore, it is known as Students t-test. Applications of t-test: Test of hypothesis about the population mean. Test of hypothesis about the difference between the two means in case of independent samples.

 Test of hypothesis about the difference between the two means in case of dependent samples. Test of hypothesis about an observed coefficient of correlation.

TEST OF HYPOTHESIS ABOUT THE POPULATION MEAN We use t-test and the appropriate test statistic t to used is :

HYPOTHESIS TESTING Ho: There is no significant impact of Dividend announcement on stock market return. H1: There is a significant impact of Dividend announcement on stock market return.

Tata Consultancy Services Limited

Paired Samples Statistics Mean N Std. Deviation Std. Error Mean

Pair 1

before_dividend_a -.153450 nnouncement after_dividend_an nouncement

15

1.3638178

.3521362

-.009667

15

1.0057904

.2596940

Paired Samples Test Paired Differences 95% Confidence Interval Std. Mean Pair 1 before_dividend _announcement after_dividend_a nnouncement 1.4378298 1.6434596 .4243394 E-1 -1.0539006 .7663346 -.339 14 .040 Deviation Std. Error Mean of the Difference Lower Upper t df Sig. (2tailed)

INTERPRETATION: As the significant value is less than .05 so there is significant impact of before dividend announcement on after dividend announcement.

Reliance
Paired Samples Statistics Mean Pair 1 before_dividend -.404515 _announcement after_dividend_ .166570 announcement N 15 15 Std. Deviation .9660090 1.0367643 Std. Error Mean .2494224 .2676914

Paired Samples Test Paired Differences 95% Confidence Interval Std. Mean Pair 1 before_dividend _announcement after_dividend_a nnouncement 5.7108484 1.5483780 .3997895 E-1 -1.4285480 .2863783 -1.428 14 .017 Deviation Std. Error Mean of the Difference Lower Upper t df Sig. (2tailed)

INTERPRETATION: As the significant value is less than .05 so there is significant impact of before dividend announcement on after dividend announcement.

COAL INDIA

Paired Samples Statistics Mean Pair 1 before_dividend_ announcement after_dividend_a nnouncement .350255 -.956398 N 15 15 Std. Deviation 1.1805843 1.4056076 Std. Error Mean .3048255 .3629263

Paired Samples Test Paired Differences 95% Confidence Interval Std. Mean Pair 1 before_dividend _announcement - 1.3066538 after_dividend_a nnouncement E0 1.8170811 .4691683 .3003878 2.3129198 2.785 14 .015 Deviation Std. Error Mean of the Difference Lower Upper t df Sig. (2tailed)

INTERPRETATION: As the significant value is less than .05 so there is significant impact of before dividend announcement on after dividend announcement.

SAMPLE AND SAMPLING DESIGN 1

SAMPLE DESIGN: A sample design is a definite plan for obtaining a sample from the sampling frame. It refers to the technique or the procedure that is adopted in selecting the sampling units from which inferences about the population is drawn. Sampling design is determined before the collection of the data. Several decisions have to be taken in context to the decision about the appropriate sample selection so that accurate data is obtained and efficient results are drawn. Following questions have to be considered while sampling design What is the relevant population? What is the parameter of interest? What is the sampling frame? What is the type of sample? What sample size is needed? How much will it cost? Sample Unit: - In this study, the sampling unit is analysis of top three companies of BSE100 on the basis of market capitalization.

 Sample Size: - It indicates the numbers of years to be studied. Though large samples give more reliable results than small samples but due to limitations of time and money, the sample size will be restricted to four quarters of top three companies on BSE100 TCS, Reliance, and Coal India. TYPES OF INVESTIGATION18

Type of investigation in my study will be Correlation 39. Because my main motive is to check whether there is significant relationship between the cost of holding inventory on sales and profitability. So investigation type will be correlation type. DATA COLLECTION2 After the research problem has been identified and selected the next step is to gather the requisite data. While deciding about the method of data collection to be used for the researcher should keep in mind two types of data primary and secondary

PRIMARY DATA3: -

The primary data are those, which are collected afresh and for the first time, and thus happened to be original in character. We can obtain primary data either through observation or through direct communication with respondent in one form or another or through personal interview.

SECONDARY DATA2: Secondary data means that data that are already available i.e. refers to data which has already been collected and analyzed by someone else. The sources used in this case are Magazines Journals Websites Company profile Capital line

DATA ANALYSIS:

For data analysis mostly the Hypothesis Testing will be used. By using SPSS and Eview Software it will be performed. Statistical tools36 will also be used. Research Design of the Study1

Study Setting Purpose of study Time Horizon Data Collection Sampling Period

Non-Contrived Descriptive Cross-Sectional Secondary Data 15days Pre and Post announcement

STATISTICAL TOOLS
Introduction: An educated citizen needs an understanding of basic statistical tool to function in a world that is becoming increasingly dependent on quantitative information. Statistics means numerical description to most people. In fact the term statistics is generally used to mean numerical facts and figures such as agriculture production during a year, rate of inflation and so on. However as a subject of study, statistics refers to the body of principles and procedures developed for the collection, classification, summarization and interpretation of numerical data and for the use of such data.

MEANING:Broadly speaking, the term statistics has been generally used in two senses: Plural Sense Singular Sense Plural sense refers to the numerical data. Singular Sense refers to a Science in which we deals with the techniques of collecting, classifying, presenting, analyzing and interpreting the data, the concept in its singular sense, refers to Statistical Method. PURPOSE: Without the assistance of Statistical Method, an organization would find it impossible to make sense of the huge data. The purpose of statistics is to: Analyze Summarize Investigate Record

TOOLS USED:Statistical tools are the basic measures, which helps in defining the relation between different items, present, past and future trend of the future trend of the particular business etc. A wide variety of statistical tools are available and any of them can be used by any businessman depending upon the nature of his trade. Statistical tools are (classification): CORRELATION REGRESSION

IMPULSE RESPONSE

CORRELATION According to Croxton and Cowden, when the relationship is of a quantitative nature, the appropriate statistical tool for discovering and measuring the relationship and expressing it in a brief formula is known as correlation TYPES OF CORRELATION Correlation is classified in several different ways. Three of the most important ways are: Positive and Negative Correlation : When two variable X and Y move in same direction is Positive Correlation and when both variables move in opposite direction that is Negative Correlation. Simple, Partial and Multiple Correlations: When we study the relationship between two variables only that is Simple Correlation. When three or more variables are taken but relationship between any two of the variable is studied, assuming other variables as constant that is Partial Correlation and when we study the relationship among three or more variables that is Multiple Correlation. Linear and Curvi-Linear Correlation: when the ratio of change of two variables X and Y remains constant throughout, then they are said to be Linear Correlated and when the ratio of change between the two variables is not constant but changing, then it is said to be Curvi-Linear.

DEGREE OF CORRELATION:Sr. No. Degree correlation 1 2 Perfect correlation High Degree of +1 Between to+1 +.75 -1 Between -.75 to-1 of Positive Negative

correlation

Moderate

Degree

Between to+.75

+.25

Between to-.75

-.25

of Correlation 4 Low Degree of

Between to+.25

Between 0 to-.25

Correlation 5 Absence Correlation of

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Correlation between Before Dividend Announcement and After Dividend Announcement
Correlations before_dividend_an after_dividend_ann nouncement ouncement Before_Divi Pearson Correlation dend_annou Sig. (2-tailed) ncement N after_Divide Pearson Correlation nd_announce Sig. (2-tailed) ment N Interpretation:1 15 .826 .016 15 15 .826 .016 15 1

The correlation between before dividend announcement and after dividend announcement is found to be significant. As it can be seen that its value is .826 which shows that they are highly positively correlated to each other.

Reliance

Correlations before_ after_ dividend_announce dividend_announce ment ment before_dividend_anno Pearson Correlation uncement Sig. (2-tailed) N after_dividend_annou Pearson Correlation ncement Sig. (2-tailed) N Interpretation:The correlation between before dividend announcement and after dividend announcement is found to be significant. As it can be seen that its value is -.694 which shows that they are moderate negative correlated to each other. COAL INDIA Correlations before_ after_ dividend_announce dividend_announce ment ment before_dividend_annou Pearson Correlation ncement Sig. (2-tailed) N after_dividend_announc Pearson Correlation ement Sig. (2-tailed) N Interpretation:The correlation between before dividend announcement and after dividend announcement is found to be significant. As it can be seen that its value is .942 which shows that they are highly positive correlated to each other. 1 .942 .012 15 .942 .012 15 15 15 1 1 -.694 .027 15 -.694 .027 15 15 15 1

REGRESSION Regression It is the study of the nature of relationship between the variables so that one may be able to predict the unknown value of on variable for a known value of another variable.

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Model Summary Model 1 R .826a R Square .683 Adjusted R Square -.073 Std. Error of the Estimate 1.0417367

a. Predictors: (Constant), before_ dividend_announcement ANOVAb Model 1 Regression Residual Total Sum of Squares .055 14.108 14.163 df 1 13 14 Mean Square .055 1.085 F .050 Sig. .016a

a. Predictors: (Constant), before_ dividend_announcement b. Dependent Variable: after_ dividend_announcement Coefficientsa Unstandardized Coefficients Model 1 (Constant) before_tcs B -.003 .046 Std. Error .271 .204 .062 Standardized Coefficients Beta t -.010 .225 Sig. .042 .016

a. Dependent Variable: after_ dividend_announcement Interpretation: As R square value is .683 which means that after dividend announcement impacts before dividend announcement to the extent of 68.3%.

Reliance

Model Summary Model 1 R .694a R Square .481 Adjusted R Square -.036 Std. Error of the Estimate 1.0553724

a. Predictors: (Constant), before_ dividend_announcement

ANOVAb Model 1 Regression Residual Total Sum of Squares .569 14.480 15.048 df 1 13 14 Mean Square .569 1.114 F .511 Sig. .027a

a. Predictors: (Constant), before_ dividend_announcement b. Dependent Variable: after_ dividend_announcement Coefficientsa Unstandardized Coefficients Model 1 (Constant) before_reliance B .082 -.209 Std. Error .297 .292 -.194 Standardized Coefficients Beta t .277 .715 Sig. .017 .027

a. Dependent Variable: after_ dividend_announcement

Interpretation: As R square value is .481 which means that after dividend announcement impacts before dividend announcement to the extent of 48.1%.

COAL INDIA

Model Summary Model 1 R .942a R Square .887 Std. Error of the Adjusted R Square Estimate -.076 1.4583642

a. Predictors: (Constant), before_ dividend_announcement

ANOVAb Model 1 Regression Residual Total Sum of Squares .012 27.649 27.660 df 1 13 14 Mean Square .012 2.127 F .005 Sig. .012a

a. Predictors: (Constant), before_ dividend_announcement b. Dependent Variable: after_ dividend_announcement Coefficientsa Unstandardized Coefficients Model 1 (Constant) before_coal_indi a B -.965 .024 Std. Error .394 .330 .020 Standardized Coefficients Beta t 2.450 .074 Sig. .029 .012

a. Dependent Variable: after_ dividend_announcement

Interpretation: As R square value is .887 which means that after dividend announcement impacts before dividend announcement to the extent of 88.7%.

IMPULSE RESPONSE Impulse response function (IRF), of a dynamic system is its output when presented with a brief input signal, called an impulse. More generally, an impulse response refers to the reaction of any dynamic system in response to some external change. In both cases, the impulse response describes the reaction of the system as a function of time (or possibly as a function of some other independent variable that parameterizes the dynamic behaviour of the system).

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Interpretation With announcement in dividend there is the response to stock market return and vice versa. Reliance

Interpretation With announcement in dividend there is the response to stock market return and vice versa.

COAL INDIA

Interpretation With announcement in dividend there is the response to stock market return and vice versa.

LIMITATIONS OF THE STUDY

However I have tried my best in collecting the relevant information yet there are always present some limitations under which research has to work. Financial analysis is a powerful mechanism to determining financial strength and weakness of a firm. But, the analysis is based on the information available in the financial statements. Thus, the financial analysis suffers from serious inherent limitations of financial statements, changes in accounting policies of the firm, accounting concepts & conventions and personal judgment etc. Here following are some limitations under which I had to work as show below:

Sample Size: The sample size analyzed was limited over fifteen days, which may not be fully represented of the universe. A large sample size could not be taken due to time & cost constraints.

Time and Resource Constraints: I had a limited time for conducting this analysis report, which was of 6 weeks only so some short falls may be present. Along with the resource constraint also create limitation in study.

Lack of Experience: The lack of experience may have caused some errors in administration of this research. Non-coverage of certain aspects: Due to confidential nature of some documents the same were not available for the study. Only Interim Report: Financial statements do not give a final picture of the concern the data given in these statements in only approximately the actual position can only be determined when the business is solid or liquidated.

Lack of proper response: Getting the informations from the employees is also a tedious task. As there are many employees that are not in a position to tell us correct information about the project or study and also sometimes they do not show any interest.

Lack of adequate standards: There are not accepted standards or rules of thumb for all ratios , which can be accepted as norms. It renders interpretation of the financial statements difficult.

RESULTS AND FINDING

In correlation test on TCS researcher found that before dividend announcement has high degree positive correlation with after dividend announcement.

In correlation test on Reliance researcher found that before dividend announcement has moderate degree negative correlation with after dividend announcement. In correlation test on Coal India researcher found that before dividend announcement has high degree positive correlation with after dividend announcement. In regression analysis on TCS researcher depict that after dividend announcement have effect on before dividend announcement i.e. 68.2%. In regression analysis on Reliance researcher depict that after dividend announcement have effect on before dividend announcement i.e. 48.1%. In regression analysis on Coal India researcher depict that after dividend announcement have strong effect on before dividend announcement i.e. 88.7%. After applying T-TEST on TCS, Reliance, Coal India researcher find significant value is less than .05 which shows so alternate hypothesis is accepted which means the after dividend announcement has significant impact on before dividend announcement.

RECOMMENDATIONS

BIBLIOGRAPHY BOOKS: 1. Donald R. Cooper and Pamela S. Schindler (2000) , Business Research Methodology 5th edition, Tata Mc Graw Hill pp.144-148. 2. Kothari C.R (1995). Research Methodology Methods and Techniques 4th edition, New Age International Publishers pp.27-42. 3. Beri G.C (1998).Marketing Research, 4th edition, Tata Mc Graw Hill pp.121-123. 4. Chandra Parsanna (1997) Financial Management7th edition, Tata Mc Graw Hill pp.21-22. 5. Jain, T.R., and Aggarwal, Dr. S.C6 (2004) Statistics for M.B.A10th edition, V.K Publications pp.1-3. 6. Jain T.R. & Aggarwal S.C(2002) Statistics for MBA,3rd edition, V.K Publications pp.73-75 7. Pandey I.M (2001), Financial Management, Vikas Publishing House Ltd. 9th edition 2005 pp -605-623. 8. Uma Sekaran (2000), Business Research 4th edition John Wiley & Sons pp. 25-45.

9. D.K Goel, Rajesh Goel and Shelly Goel ,(2010), Management Accounting and Finance Management, Avichal Publishing Company,7th Revised Edition pp13.113.27 10. D.K Goel, Rajesh Goel and Shelly Goel ,(2010), Management Accounting and Finance Management, Avichal Publishing Company,7th Revised Edition pp4.1-4.139 11. R.K. Mittal , ,Management Accounting & Financial Management, 6th Edition VK Publishing 12. Dr. P Periasamy, Financial Management, 2nd Edition, Tata McGraw Hill Education Private Limited 13. A.K. Vashisht and J.S. Pasricha , Management Accounting, Unistar book Pvt. Ltd. Pp18.1-18.40. 14. Gupta Shashi K. and Sharma R. K., Management Accounting 6th Edition. JOURNALS MUKESH BAJAJ and ANAND M. VIJH0,(March 1995) Trading Behavior and the Unbiasedness of the Market Reaction to Dividend Announcements the journal of finance, vol. L, no. 1 pp 255- 279. Solanki Ashvin H.,(Aug. 2012) An Empirical Study of Corporate Dividend Policy Advances In Management, Vol 5 (8) pp 38-46. Renuka Sharma, (September 2011) Stock Price Behaviour around Dividend Announcements: An Event Study Methodology Journal of Management, pp 2332. T. Mallikarjunappa & T . Manjunatha, (July-December 2009) Stock Price Reactions to Dividend Announcements Journal of Management & Public Policy, Vol. 1 No. 1, pp 43- 56.

Dar-Hsin Chen, Hsiang-Hsi Liu, and Cheng-Ting Huang,( janfeb 2009) The Announcement Effect of Cash Dividend Changes on Share Prices chinese economy, vol. 42, no. 1, pp. 6285.

Suman Banerjee, Vladimir A, Gatchev, and Paul A, Spindr, (June 2007)Stock Market Liquidity and Firm Dividend Policy Journal of finance, Vol. 42, No. 2, pp. 369-398.

Bhatia parul, (2010), A study of dividend announcements on stock return International research & educational consortium

Aivazian varouj , booth Laurence ,(2003) ,Do emerging market firm follow different dividend policies from us firms? journal of finance research

WEBSITES: http://www.vyoms.com/company-profiles/tcs.asp http://www.ril.com/html/aboutus/about_brands.html http://www.coalindia.in/Company.aspx?tab=0 http://www.xlstat.com/demo_pca.htm http://www.spss.com/corpinfo/fags.htm http://www.moneycontrol.com/india/stockpricequote/computers-software/tataconsultancy-services/TCS

ANNEXURE I Correlation Tata Consultancy Services Limited

Correlations before_dividend_ann after_dividend_anno ouncement uncement Before_Divid Pearson Correlation end_announc Sig. (2-tailed) ement N after_Dividen Pearson Correlation d_announcem Sig. (2-tailed) ent N 1 .826 .016 15 .826 .016 15 15 15 1

Reliance
Correlations before_ after_ dividend_announce dividend_announce ment ment before_dividend_ann Pearson Correlation ouncement Sig. (2-tailed) N after_dividend_annou Pearson Correlation ncement Sig. (2-tailed) N 15 -.694 .027 15 15 1 -.694 .027 15 1

COAL INDIA Correlations before_ after_ dividend_announce dividend_announce ment ment before_dividend_announ Pearson Correlation cement Sig. (2-tailed) N after_dividend_announce Pearson Correlation ment Sig. (2-tailed) N 1 .942 .012 15 .942 .012 15 15 15 1

ANNEXURE II Regression Tata Consultancy Services Limited

Model Summary Model 1 R .826a R Square .683 Adjusted R Square -.073 Std. Error of the Estimate 1.0417367

a. Predictors: (Constant), before_ dividend_announcement

ANOVAb Model 1 Regression Residual Total Sum of Squares .055 14.108 14.163 df 1 13 14 Mean Square .055 1.085 F .050 Sig. .016a

a. Predictors: (Constant), before_ dividend_announcement b. Dependent Variable: after_ dividend_announcement

Coefficientsa Unstandardized Coefficients Model 1 (Constant) before_tcs B -.003 .046 Std. Error .271 .204 .062 Standardized Coefficients Beta t -.010 .225 Sig. .042 .016

a. Dependent Variable: after_ dividend_announcement

Reliance

Model Summary Model 1 R .694a R Square .481 Adjusted R Square -.036 Std. Error of the Estimate 1.0553724

a. Predictors: (Constant), before_ dividend_announcement

ANOVAb Model 1 Regression Residual Total Sum of Squares .569 14.480 15.048 df 1 13 14 Mean Square .569 1.114 F .511 Sig. .027a

a. Predictors: (Constant), before_ dividend_announcement b. Dependent Variable: after_ dividend_announcement

Coefficientsa Unstandardized Coefficients Model 1 (Constant) before_reliance B .082 -.209 Std. Error .297 .292 -.194 Standardized Coefficients Beta t .277 .715 Sig. .017 .027

a. Dependent Variable: after_ dividend_announcement

COAL INDIA

Model Summary Model 1 R .942a R Square .887 Std. Error of the Adjusted R Square Estimate -.076 1.4583642

a. Predictors: (Constant), before_ dividend_announcement

ANOVAb Model 1 Regression Residual Total Sum of Squares .012 27.649 27.660 df 1 13 14 Mean Square .012 2.127 F .005 Sig. .012a

a. Predictors: (Constant), before_ dividend_announcement b. Dependent Variable: after_ dividend_announcement

Coefficientsa Unstandardized Coefficients Model 1 (Constant) before_coal_indi a B -.965 .024 Std. Error .394 .330 .020 Standardized Coefficients Beta t 2.450 .074 Sig. .029 .012

a. Dependent Variable: after_ dividend_announcement

ANNEXURE III
IMPULSE RESPONSE

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Reliance

COAL INDIA

ANNEXURE IV Snapshot