1
CHAPTER I
INTRODUCTION
1.1 Background of the Study
Dividend refers to the portion of net income paid out to the shareholders. It is paid in the
form of cash or stock for making investment over a period of time bearing risk of
investment. Deciding how much to pay the shareholders by the way of dividend decision.
Dividend decision of the firm is yet another crucial area of an integral part of firm’s
financial decision as it provides internal financing. Hence, it is a significant subject
matter for the study and research. When it comes to dividend theories, there are two
foremost schools of thought, the first is that dividends have an impact on firm’s value and
the second is that dividends do not have an impact on firm value. It was seen that the
beginning of dividend policy as important to investors was, to some extent, determined
by the evolving state of financial markets. (Kothari, 2012)
Effect of dividend policy is concerned with determining the proportion of firm’s earning
to be distributed in the form of cash dividend and the portion of earnings to be retained.
Dividend decision affects the value of the firm’s common stock in the market place. The
firm’s effect of dividend policy is influenced by a large no of factors such as legal
requirements, net profit rule, insolvency rule, access of the capital market expected rate
of return etc. when establishing an optimal effect of dividend policy a firm shareholders
preference along with investment opportunities and relative cost of retained equity versos
externally raised equity. The dividend decision is regarded as a financing decision since
any cash dividend paid reduces the amount of cash available for investment by the bank.
The prime objective of financial management in organization is to maximize its value to
the owners and the shareholders. Thought this is challenged by many researchers, the
value here often understood to be reflected in the company’s share price. According to
Barman if dividends are the key indicator of share price and then share price is the key
indicator of firm value, so as to maximize shareholders wealth, the company should adopt
a dividend policy that will increase the share price. When a company makes profits, it can
2
either decide to retain the profits for investments in, new projects or pay out to the
shareholders as dividends.
Dividend can be two types:
i)
Cash dividend
ii)
Stock dividend.
i)
Cash dividend is the distribution of funds or money paid to stockkholders
generally as part of the corporation’s current earnings or accumulated profits.
Cash dividends are paid directly in money, as opposed to being paid as a stock
dividend or other form of value.
ii)
Stock dividend is a dividend payment to shareholders that is made in shares rather
than as cash. The stock dividend has the advantage of rewarding shareholders
without reducing the company’s cash balance, although it can dilute earnings per
share (Investopedia.com).
Dividend and market price of commercial banks in Nepal can vary depending on the
bank’s financial performance, economic conditions and other factors. In Nepal,
commercial banks generally pay dividends to their shareholders on a quarterly or annual
basis, depending on the bank’s policies and performance. As for the market price is
determined by supply and demand in the stock market. It is also important to note that the
stock market in Nepal is not that developed as compared to other countries so the
information might not be as readily available as it would be in other markets.
Market price per share also knows as the stock price, refers to the current price at which
shares of a particular company’s stock are trading on the stock market. The price is
determined by supply and demand in the market, and can fluctuate based on various
factors such as company’s financial performance, overall market conditions and investor
sentiment.
3
1.2 Profile of the Organization
Sanima Bank Limited
Sanima, promoted by prominent and dynamic Non-Resident Nepalese (NRP)
Businessmen, commenced its operation in 2004 as a National Level Development Bank.
Since February 2012, Sanima has been functioning as an “A” Class Commercial Bank
with its registered office at “Alakapuri”, Naxal, Kathmandu.
Sanima Bank is committed to provide one window financial solutions to the different
customer segments and to achieve healthy growth in profitability consistent with the
bank’s risk appetite. The bank has been dedicated to maintain the highest level of ethical
standards, professional integrity, corporate governance and regulatory compliance. As a
result, Sanima is perceived as a Strong and Reliable player in the banking industry.
Sanima has been committed to meet customer expectations in all areas of its business
through continuous improvement for overall benefit of the economy.
Sanima Bank offers a wide range of banking products and financial services corporate
and retail customers through 102 full-fledged branches and 28 extension counters from
all 7 provinces. With vision to be a leading bank of Nepal and mission continuously be
innovative and embrace the changes to delight investors, staff, customers, regulators and
the community we serve.
Everest Bank Limited
Catering to more than 12 lacs customers, Everest Bank Limited (EBL) is a name you can
depend on for professionalized and efficient banking services. Founded in 1994, the bank
has been one of the leading banks of the country and has been catering its services to
various segments of the society. With clients from all walks of life, the Bank has helped
the nation to develop corporately, agriculturally & industrially.
With the joint venture partner Punjab National Bank (PNB), india’s first Swadeshi Bank,
commenced its operation on April 12, 1895 form Lahore and was the first bank purely
managed by Indian with Indian capital. During the long history of the bank, 9 banks have
been merged with PNB.
4
Everest Bank Limited provides customer-friendly services through its wide network
connected through ABBS system, which enables customers for operational transactions
from any branches. The bank has 122 Branches, 157 ATM counters, 31 Revenue
Collection Counters and 3 Extension Counters across the country making it a very
efficient and accessible bank for its customers, anytime and anywhere.
With vision to be a leading commercial bank with PAN Nepal presence and become a
household name, providing wide range of financial products and services under one roof.
And mission to growth through Banking for ALL.
1.3 Objective of the Study
The objective of the study on the topic, dividend and market price of Sanima Bank and
Everest Bank Limited are to evaluate the dividend and market price of the sample banks.
More specific the study would attempt to deal with the following objectives.

To explore the dividend policy and MPS of the sample banks

To examine the relationship of DPR and MPS of the sample banks
1.4 Rationale of the Study
Some studies the investigated the determinants of dividend and market price of the
sample banks. However, to the best knowledge the single study has focused the banking
industry. Thus, this study will have significant role to play in filling gap in understanding
of the dividend and market price of the bank. With the help of the report of this study, the
management may apply corrective measures for the improvement of the bank
performance. After the completion, this report will be kept in the library, which plays the
role of reference to the students making the similar study in future.
1.5 Literature Review
The literature review section of the study cover the overview of the Nepal banking
system and capital requirement, the theoretical and empirical studies review in the areas
of dividend policy on market price with reference to SBL and EBL. Moreover, it presents
the variable summary and conceptual framework.
5
Conceptual review
In this section the researcher provide a critical analysis of the most relevant theories,
from the classical to the modern approaches, also presenting the theoretical concepts of
the studied field, the definition of the main variables, as the main theories and researches
relating the dividend policy of Nepal Bangladesh Bank Limited.
Independent
variable
Dependent
variable
Dividend Policy
Market Price
- DPS
- MPS
A dividend policy is the policy a company uses to structure its dividend payout to
shareholders. In other word, a dividend policy dictates how much cash is returned to
shareholders. When deciding what dividend to pay, if any, a company must look at the
profits it has made and weight up how much should be retained in the business to fund
future growth and how much should be returned to investors. if it has had a bad year and
it doesn’t have enough profit to cover its investment needs and the dividend, but expects
the poor performance to be a one-off, then it may still make a payout to investor by either
dipping into any surplus cash it has or using debt.
Types of dividend policies
There is no definitive way of forming a dividend policy but there are four main types that
are used by most publicly listed businesses. However, there are additional ways to return
cash to shareholders too. According to Institute of Chartered Accounts of Nepal in their
book -Financial Management for CAP-II (2011).
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1. Regular dividend policy
2. Constant dividend policy
3. Constant payout ratio policy
4. Stable rupee dividend policy
5. Irregular dividend policy
6. No dividend policy
7. Residual dividend policy
1. Regular dividend policy
Payment of dividend at the usual rate is termed as regular dividend. The investor such as
retired persons, widows and other economically weaker persons prefer to get regular
dividends.
2. Constant dividend policy
Some companies follow a policy of paying fixed dividend per share irrespective of the
level of earnings year after year. Such firms, usually, create a ‘Reserve for Dividend
Equalization’ to enable them to pay the fixed dividend even in the year when the earnings
are not sufficient or when there are losses. A policy of constant dividend per share is
most suitable to concerns whose earnings are expected to remain stable over a number of
years. Figure given below shows the behavior of dividend in such policy.
3. Constant payout ratio
Constant pay-out ratio means payment of a fixed percentage of net earnings as dividends
every year. The amount of dividend in such a policy fluctuates in direct proportion to the
earnings of the company. The policy of constant pay-out is preferred by the firms because
it is related to their performance.
4. Stable rupee dividend policy
In spite of many advantages, the stable dividend policy suffers from certain limitations.
Once a stable dividend policy is followed by a company, it is not easier to change it. If
7
the stable dividends are not paid to the shareholders on any account including insufficient
profits, the financial standing of the company in the minds of the investors is damaged
and they may like to dispose off their holdings. It adversely affects the market price of
shares of the company. And if the company pays stable dividends in spite of its
incapacity, it will be suicidal in the long-run.
5. Irregular dividend policy
Some companies follow irregular dividend payments on account such as uncertainty of
earnings, unsuccessful business operations and lack of liquid resources.
6. No dividend policy
A company may follow a policy no dividends presently because of its unfavourable
working capital position or on account of requirements of funds for future expansion and
growth.
7. Residual dividend policy
When new equity is raised floatation costs are involved. This makes new equity cost then
retained earnings. Under the Residual approach, dividends are paid out of profits after
making provision for money required to meet upcoming capital expenditure
commitments.
Review of previous reports
The concept of dividend policy faced unresolved argument by researchers although it is a
pivotal decision for the prosperity of firms in both advanced and upcoming economies
(Hafeez & Attiya, 2009). The dynamics of dividend policy has remained anonymous in
most study findings focusing on its relationship with other associated variables. The firm
dividend policy practices by different firms has not been universally accepted (Brealey
& Myers, 2003).
8
Pandey (2010) impact of cash dividend policy on the current prices of company shares is
considered very important, not only for policy makers, but also for investors, portfolio
managers, and economists interested in the performance of capital markets.
Brigham & Houston (2011) these two arguments discussed above are the underlying
assumption of the irrelevance hypothesis and according to these arguments; shareholders
should be indifferent between capital gains and dividends. This is turn explains why the
shareholders are unwilling to pay a higher price for dividend paying stocks, which in
turns make the question of dividends irrelevant.
Ghimire (2013) in his report entitled Dividend policy of Mega Bank Limited., defined
with an objective of the study to find out various forms of dividend policies applied in an
organization and he found that the bank is launching different forms of dividend polices
he run the bank successfully.
Thapa (2014) in her report situated Dividend policy of Kist Bank Limited, defined as
objective of the study to find out whether the firm can pay dividends using either residual
effect of dividend policy or stable effect of dividend policy and the found that the bank is
giving more emphasis to the stable effect of dividend policy.
Habib, et al. (2012) examine the relationship between dividend policy measure i.e.
dividend yield and pay-out ratio and share price volatility in Pakistani stock market. The
findings of regression analysis showed the positive relationship of share price volatility
with dividend yield, but negative with pay-out ratio.
Kafle (2019) found a significant positive relationship between dividend payout ratio and
firm value, suggesting that dividend policy is an important determinant of firm value for
commercial banks in Nepal.
Zhang and Zhang (2019) conducted a study on the relationship between dividend policy
and market price of Chinese banks and found that dividend payout has a positive effect
on market price, while retention ratio has a negative effect.
9
Goyal and Jain (2016) conducted a study on Indian commercial banks and found that
dividend policy significantly affects market price, and high dividend paying banks have a
higher market price than low dividend paying banks.
1.6 Method of the Study
The purpose of this chapter is to discuss the methods adopted throughout the study to
accomplish the research objectives. This chapter gives the theoretical foundation of data
collection and analysis for the research study. It shows the framework of data collection
and presentation and analysis.
1.6.1
Research design
This research has followed the descriptive research design. Research design that is
developed with the aim of studying the subject of details and explain the facts and
characteristics related to research problem is known as descriptive design. The main goal
of this report is to describe the data and characteristics about what is being studied.
1.6.2
Population and sample
The population refers to the industries of the same nature and its services and product in
general. Population is the entire collection of interest i.e People, Objects or events as
defines by the researcher and sample is the entire collection of all observations of the
interest for the researcher. Currently, there are 22 commercial bank in Nepal, out of them
we selected the Sanima Bank Limited and Everest Bank Limited are taken as a sample
for the study of this report.
1.6.3
Data collection procedure
While preparing the data in collected from secondary sources. Secondary data refers to
data that was collected by someone other than the user. It is originally collected from
different sources. So, in the course of preparing this report the necessary data and
documents are collected only from secondary sources.
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1.6.4
Nature and sources of data.
Among the primary and secondary sources of data this research is fully based on
information obtained from the secondary data the researcher had mainly based on
secondary data. In this study collection data and information from secondary data i.e.
annual reports, websites, news paper, journals, previous research work etc.
Secondary data
Secondary data is defined as data collected earlier for a purpose other than the one
currently being pursued. Secondary sources refer to those for already gathered by others.
They are referred to as coming from secondary sources such include
1.6.5

Annual Report

Books

Related Articles

Journals and Websites.
Data analysis tools
The analysis of data consists of organizing and performing statistical analysis in this
study various financial and statistical tools have been used to achieve the objective of this
study. According to the pattern of data available the analysis of data will be done.
Different Financial and statistical tools have been used to prepare this report writing.
1.6.6
Technique of analysis
In this report, the researchers have used the following presentation and analysis tools:

Tables

Percentage

Correlation

Financial tools
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1.7 Limitation of the Study
It is the area which is not covers by this report writing. This report writing is limited only
commercial bank as only study dividend and market price of the sample banks. The study
done for the partial fulfillment for Bachelor of Business Studies (BBS).

The study has covered the period of five financial year starting from 2074/75
BS to 2078/79 BS.

This report is based on secondary data only.

This report is based on limited financial variables (dividend)

Simple financial and statistical tools are used.
12
CHAPTER-II
RESULTS AND ANALYSIS
2.1 Data Presentation
The data collected from the various sources are analyzed and findings its results. Data
analyzed according to the research methodology as mentioned. In this chapter data has
been presented tabular form and bar diagram. To obtain best result, the data has been
analyzed according to the research methodology as mentioned earlier in previous
chapter. Various ratios have been calculated on the basic of the annual report of the
organization.
2.1.1: Dividend Per Share
Table 2.1
Dividend Per Share
Fiscal Year
SBL
EBL
2074/75
28
20
2075/76
33
25
2076/77
17.20
10.53
2077/78
18.80
10.32
2078/79
11.96
20.68
(Sources: Annual Report of SBL & EBL)
Table 2.1 shows that the dividend per share of Sanima Bank Limited and Everest Bank
Limited in the five fiscal year period from 2074/75 BS to 2078/79 BS. The dividend per
share of the SBL are 28 percent, 33 percent, 17.20 percent, 18.80 percent and 11.96
percent in the five fiscal year period. The higher dividend per share of the SBL is 33
percent which is in the fiscal year 2075/76 BS and lower ratio is 11.96 which is in the
fiscal year 2078/79 BS. The dividend per share of the SBL is in fluctuation trend over the
five fiscal year period. The dividend per share of the EBL are 20 percent, 25 percent,
13
10.53 percent, 10.32 percent and 20.68 percent in the five fiscal year period. The higher
dividend per share of the EBL is 25 percent which is in the fiscal year 2075/76 BS and
lower ratio is 10.32 percent which is in the fiscal year 2077/78 BS. The dividend per
share of the EBL is in fluctuation trend over the five fiscal year period.
35
30
25
20
SBL
15
EBL
10
5
0
2074/75
2075/76
2076/77
2077/78
2078/79
Fiscal Year
Figure 2.1: Trend Line of Dividend Per Share
Figure 2.1 shows that the Dividend Per Share of the Sanima Bank and Everest Bank
Limited in the five fiscal year period from 2074/75 BS to 2078/79 BS. The dividend per
share of the SBL are 28 percent, 33 percent, 17.20 percent, 18.80 percent and 11.96
percent in the five fiscal year period. The higher dividend per share of the SBL is 33
percent which is in the fiscal year 2075/76 BS and lower ratio is 11.96 which is in the
fiscal year 2078/79 BS. The dividend per share of the SBL is in fluctuation trend over the
five fiscal year period. The dividend per share of the EBL are 20 percent, 25 percent,
10.53 percent, 10.32 percent and 20.68 percent in the five fiscal year period. The higher
dividend per share of the EBL is 25 percent which is in the fiscal year 2075/76 BS and
lower ratio is 10.32 percent which is in the fiscal year 2077/78 BS. The dividend per
share of the EBL is in fluctuation trend over the five fiscal year period.
14
2.1.2: Market Price Per Share
Table 2.2
Market Price Per Share
Fiscal Year
SBL
EBL
2074/75
324
663
2075/76
348
666
2076/77
330
675
2077/78
485
738
2078/79
276
439
(Sources: Annual Report of SBL & EBL)
Table 2.2 shows that the market price per share of the Sanima Bank Limited and Everest
Bank Limited in the five fiscal year period from 2074/75 BS to 2078/79 BS. The market
price per share of the SBL are Rs 324, Rs 348, Rs 330, Rs 485 and Rs 276 in the five
fiscal year period. The higher amount is Rs 485 which is in the fiscal year 2077/78 BS
and lower amount is Rs 276 which is in the fiscal year 2078/79 BS. The market price per
share of the SBL is in fluctuation trend over the five fiscal year period. The market price
per share of the EBL are Rs 663, Rs 666, Rs 675, Rs 738 and Rs 439 in the five fiscal
year period. The higher market price per share of the EBL is Rs 738 which is in the fiscal
year 2077/78 BS and lower market price per share of the EBL is Rs 439 which is in the
fiscal year 2078/79 BS. The market price per share of the EBL is in fluctuation trend over
the five fiscal year period.
15
800
700
600
500
400
SBL
300
EBL
200
100
0
2074/75
2075/76
2076/77
2077/78
2078/79
Fiscal Year
Figure 2.2: Trend Line of Market Price Per Share
Figure 2.2 shows that the trend line of market price per share of Sanima Bank Limited
and Everest Bank Limited in the five fiscal year period from 2074/75 BS to 2078/79 BS.
The market price per share of the SBL are Rs 324, Rs 348, Rs 330, Rs 485 and Rs 276 in
the five fiscal year period. The higher amount is Rs 485 which is in the fiscal year
2077/78 BS and lower amount is Rs 276 which is in the fiscal year 2078/79 BS. The
market price per share of the SBL is in fluctuation trend over the five fiscal year period.
The market price per share of the EBL are Rs 663, Rs 666, Rs 675, Rs 738 and Rs 439 in
the five fiscal year period. The higher market price per share of the EBL is Rs 738 which
is in the fiscal year 2077/78 BS and lower market price per share of the EBL is Rs 439
which is in the fiscal year 2078/79 BS. The market price per share of the EBL is in
fluctuation trend over the five fiscal year period.
16
Earning Per Share
Table 2.3
Earning Per Share
Fiscal Year
SBL
EBL
2074/75
21.22
32.78
2075/76
28.22
38.05
2076/77
20.18
29.71
2077/78
23.94
19.91
2078/79
18.48
26.30
Table 2.3 shows that the earning per share of the Sanima Bank Limited and Everest Bank
Limited in the five fiscal year period from 2074/75 BS to 2078/79 BS. The earnings per
share of the Sanima Bank Limited are Rs 21.22, Rs 28.22, Rs 20.18, Rs 23.94 and Rs
18.48 in the five fiscal year period. The higher earnings per share of the SBL is 28.22
which is in the fiscal year 2075/76 BS and lower amount is Rs 18.48 which is in the fiscal
year 2078/79 BS. The earnings per share of the SBL is in fluctuation trend over the five
fiscal year period. The earnings per share of the EBL are Rs 32.78, Rs 38.05, Rs 29.71,
Rs 19.91 and Rs 26.30 in the five fiscal year period. The higher earnings per share is
38.05 which is in the fiscal year 2075/76 BS and lower earnings per share of the EBL is
19.91 which is in the fiscal year 2077/78 BS. The earnings per share of the EPS is in
fluctuation trend over the five fiscal year period.
17
40
35
30
25
20
SBL
15
EBL
10
5
0
2074/75
2075/76
2076/77
2077/78
2078/79
Fiscal Year
Figure 2.3: Trend Line of Earning Per Share
Figure 2.3 shows that the earning per share of the Sanima Bank Limited and Everest
Bank Limited in the five fiscal year period from 2074/75 BS to 2078/79 BS. The earning
per share of the Sanima Bank Limited are Rs 21.22, Rs 28.22, Rs 20.18, Rs 23.94 and Rs
18.48 in the five fiscal year period. The higher earnings per share of the SBL is 28.22
which is in the fiscal year 2075/76 BS and lower amount is Rs 18.48 which is in the fiscal
year 2078/79 BS. The earnings per share of the SBL is in fluctuation trend over the five
fiscal year period. The earnings per share of the EBL are Rs 32.78, Rs 38.05, Rs 29.71,
Rs 19.91 and Rs 26.30 in the five fiscal year period. The higher earnings per share is
38.05 which is in the fiscal year 2075/76 BS and lower earnings per share of the EBL is
19.91 which is in the fiscal year 2077/78 BS. The earnings per share of the EPS is in
fluctuation trend over the five fiscal year period.
18
Coefficient of Correlation between Dividend and Market Price
Table 2.4
Coefficient of Correlation between Dividend and Market Price of SBL
YEAR
(X)
(Y)
XY
X2
Y2
2074/75
0.28
324
90.72
0.08
104976
2075/76
0.33
348
114.84
0.11
121104
2076/77
0.17
330
56.76
0.03
108900
2077/78
0.19
485
91.18
0.04
235225
2078/79
0.12
276
33.01
0.01
76176
N =5
∑X =
∑Y =
∑ XY =
∑ 𝑋2=
∑ Y2=
1.09
1763
386.51
0.27
646381
Here
X = DPS
Y = MPS
N = Number of Year
Now,
N ∑ XY− ∑ X×∑ Y
Coefficient of correlation (r) =
2
√N ∑ X2 – ∑(X) √N ∑ Y2 – ∑(Y)
=
2
5×386.51−1.09×1763
√5×0.27−(1.09)2 ×√5×646381−(1763)2
Coefficient of Correlation (r) = 0.07
Here coefficient of correlation 0.07 between DPS and MPS of the SBL which shows that
when DPS increase MPS increase and vice-versa.
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Table 2.4
Coefficient of Correlation between Dividend and Market Price of EBL
YEAR
(X)
(Y)
XY
X2
Y2
2074/75
0.20
663
400
0.04
439569
2075/76
0.25
666
625
0.06
443556
2076/77
0.11
675
110
0.01
455625
2077/78
0.10
738
106.50
0.01
544644
2078/79
0.21
439
427.66
0.04
192721
N =5
∑X =
∑Y =
∑ XY =
∑ 𝑋2=
∑ Y2=
0.87
3181
1670.05
0.17
2076115
Here
X = Current Ratio
Y = Return on Assets
N = Number of Year
Now,
N ∑ XY− ∑ X×∑ Y
Coefficient of correlation (r) =
2
√N ∑ X2 – ∑(X) √N ∑ Y2 – ∑(Y)
=
2
5×1670.05−0.87×3141
√5×0.17−(0.87)2 ×√5×2076115−(3181)2
Coefficient of Correlation (r) = - 0.05
Hence there is negative -0.05 correlation of coefficient which shows that when DPS
increase MPS decrease and vice-versa.
20
2.2 Findings
The major findings of the study are as follows:

The dividend per share of the SBL are 28 percent, 33 percent, 17.20 percent,
18.80 percent and 11.96 percent in the five fiscal year period. The higher dividend
per share of the SBL is 33 percent which is in the fiscal year 2075/76 BS and
lower ratio is 11.96 which is in the fiscal year 2078/79 BS. The dividend per share
of the SBL is in fluctuation trend over the five fiscal year period. The dividend
per share of the EBL are 20 percent, 25 percent, 10.53 percent, 10.32 percent and
20.68 percent in the five fiscal year period. The higher dividend per share of the
EBL is 25 percent which is in the fiscal year 2075/76 BS and lower ratio is 10.32
percent which is in the fiscal year 2077/78 BS. The dividend per share of the EBL
is in fluctuation trend over the five fiscal year period.

The market price per share of the SBL are Rs 324, Rs 348, Rs 330, Rs 485 and Rs
276 in the five fiscal year period. The higher amount is Rs 485 which is in the
fiscal year 2077/78 BS and lower amount is Rs 276 which is in the fiscal year
2078/79 BS. The market price per share of the SBL is in fluctuation trend over the
five fiscal year period. The market price per share of the EBL are Rs 663, Rs 666,
Rs 675, Rs 738 and Rs 439 in the five fiscal year period. The higher market price
per share of the EBL is Rs 738 which is in the fiscal year 2077/78 BS and lower
market price per share of the EBL is Rs 439 which is in the fiscal year 2078/79
BS. The market price per share of the EBL is in fluctuation trend over the five
fiscal year period.

The earning per share of the Sanima Bank Limited are Rs 21.22, Rs 28.22, Rs
20.18, Rs 23.94 and Rs 18.48 in the five fiscal year period. The higher earnings
per share of the SBL is 28.22 which is in the fiscal year 2075/76 BS and lower
amount is Rs 18.48 which is in the fiscal year 2078/79 BS. The earnings per share
of the SBL is in fluctuation trend over the five fiscal year period. The earnings per
share of the EBL are Rs 32.78, Rs 38.05, Rs 29.71, Rs 19.91 and Rs 26.30 in the
five fiscal year period. The higher earnings per share is 38.05 which is in the
fiscal year 2075/76 BS and lower earnings per share of the EBL is 19.91 which is
21
in the fiscal year 2077/78 BS. The earnings per share of the EPS is in fluctuation
trend over the five fiscal year period.

Hence there is negative -0.05 correlation of coefficient which shows that when
DPS increase MPS decrease and vice-versa.

Here coefficient of correlation 0.07 between DPS and MPS of the SBL which
shows that when DPS increase MPS increase and vice-versa.
22
CHAPTER III
SUMMARY AND CONCLUSION
3.1 Summary
The financial ratio indicates the dividend of the firm in a given period of time. The tools
which are used in this study are - Dividend paid amount and dividend payout ratio (DPR)
which helps the shareholders to analyze the dividend of the bank and help them in
making the investment strategies or portfolio. This report also has shown the various
forms of dividend in the bank i.e. cash dividend and stock dividend along with its
increasing and decreasing ratios or percentage. The various financial and statistical tools
used in the study shows the bank financial position and hence guide the investors whether
the particular bank is providing enough return or not. It shows the assets to stock
position, share position and also shows the share price position at the bank. Hence, we
can say that the total study is dependent on the bank dividend and explained broadly
earlier in the background of the study and in literature review.
Research methodology reflects how the data are presented by various tools and
techniques. It is also a main part of a report as it shows how clearly and effectively the
researcher has presented the report. To achieve this study descriptive research design has
been used. It represents the highlight of research design, population, sample size, data
collection techniques and sources of data collection. This study required data has been
collected from the fiscal year 2074/75 BS to 2078/79 BS.
Under this study 22
commercial bank is the population and the researcher has selected Nepal SBI Bank Ltd.
as a sample.
In the first chapter, include organization of the study, objective of the study, statement of
the problem, Rationale of the study, literature review and limitation of the study.
Different theories, policies, rules and regulations about dividend are reviewed. During
the study different journals, previous studies, websites, reports are viewed and visited to
different professionals to know the dividend . During the literature review, it is found that
there is a few research have been made on this topic.
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In the second chapter data presentation, analysis and findings the results in tabular and
graphic form.
In the third chapter the summary and conclusion are included. The summary of the study,
conclusion drawn from the study are presented and necessary suggestions are given to
the concern authorities, banks as well as Nepalese commercial banks for the betterment
of dividend .
3.2 Conclusion
In conclusion, the analysis of the dividend per share, market price per share, and earnings
per share of Sanima Bank Limited (SBL) and Everest Bank Limited (EBL) over the five
fiscal year period indicates that both banks have experienced fluctuations in their
financial performance.
SBL had a dividend per share ranging from 11.96 percent to 33 percent, with the highest
dividend being 33 percent in the fiscal year 2075/76 BS and the lowest being 11.96
percent in the fiscal year 2078/79 BS. The market price per share of SBL ranged from Rs
276 to Rs 485, with the highest price being Rs 485 in the fiscal year 2077/78 BS and the
lowest being Rs 276 in the fiscal year 2078/79 BS. The earnings per share of SBL ranged
from Rs 18.48 to Rs 28.22, with the highest earnings being Rs 28.22 in the fiscal year
2075/76 BS and the lowest being Rs 18.48 in the fiscal year 2078/79 BS.
EBL had a dividend per share ranging from 10.32 percent to 25 percent, with the highest
dividend being 25 percent in the fiscal year 2075/76 BS and the lowest being 10.32
percent in the fiscal year 2077/78 BS. The market price per share of EBL ranged from Rs
439 to Rs 738, with the highest price being Rs 738 in the fiscal year 2077/78 BS and the
lowest being Rs 439 in the fiscal year 2078/79 BS. The earnings per share of EBL ranged
from Rs 19.91 to Rs 38.05, with the highest earnings being Rs 38.05 in the fiscal year
2075/76 BS and the lowest being Rs 19.91 in the fiscal year 2077/78 BS.
24
BIBLIOGRAPHY
Books and Articles
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