This study uses a number of primary financial theories (theories of dividend relevance, signalling, agency, and irrelevance) to analyze how dividend policy affects shareholder wealth in the Indian fast-moving consumer goods (FMCG) industry. It also looks at secondary data from specific FMCG companies from 2015 to 2024 and employs a quantitative research methodology approach based on many financial dimensions beyond those typically taken into account in previous empirical research studies, such as dividend payout ratio, dividend yield, dividend growth rate, and free cash flow. In order to improve the overall robustness of their model and prepare for the use of multiple regression modeling techniques to measure Tobin's Q and total shareholder return (TSR) as proxy indicators of shareholder wealth, the authors have also included a number of control variables (firm size, leverage, and profitability). While there is a strong positive correlation between the dividend yield and shareholder wealth, the link between the dividend payout ratio and shareholder wealth exhibits contradictory behaviors. Dividend policy has a conditional influence on shareholder wealth. By offering a theoretically grounded empirical approach that can be applied to developing economies like India, the study offers data to improve the conversation around dividend programs.
Akshaya et al. (2026) studied this question.