An Appraisal of Dividesd Policy of Selected Engineering Industry

Abstract

Engineering sector is one of the prominent sectors of Bangladesh. It is one of the largest growing sector of our country. Almost 75000 peoples are working in this sector and it is one of the major sources for earning foreign currency. In this project i have tried to portrait the dividend policy followed by the selected engineering companies that are enlisted in Dhaka Stock Exchange. I have also tried to look into the capital structure of the companies by analyzing their debt and equity portion in financing their asset. It has been found that almost all the companies that i have worked with do not follow any particular dividend policy rather dividend payment is a subjective judgement of the managers. Dividend payment does not follow any constant payout ratio The companies also do not pay dividend regularly. In term of capital structure most of the firms i have analyzed here mainly depends on debit to fmance their assets. In one sense this is making the firms more risky but as the cost of debt is lower than cost of equity and it will also get tax advantage. The firm can use debt up to that level where it will fit with the firm optimum capital structure. At the very end of this project i tried to make a comparison between the firms divided policy and capital structure to see the industry trend in those two areas.