ABSTRACT
Shareholder value maximisation implies increase in the wealth of shareholders by the company in the form of high returns. Returns comprise both dividend yield and capital yield. Dividend yield arises when company regularly pays dividend to shareholders in relation to the surplus. Capital gain arises when company shows high business performance which is reflected in the stock market by increase in the market price. So, it is a planned strategy by the management to magnify the returns to shareholders by outperforming the accepted benchmarks. Dividend policy plays an important role in this. Here, the importance of an adequate dividend policy is stressed upon.
