Dividend Payout Decision and Investors’ Behavior

Abstract

The paper aims to examine the effect of dividend payout on perceived value of shareholders. The purpose
behind of this study is to understand awareness of investors about dividend payout and investment behavior.
This study is based on descriptive research design. It is based on the perception of investors and includes the
questionnaire asked to 150 investors at Kathmandu Valley. It is found that investor's preference for
investment lies in dividend payout of the organization as investors are positively influenced through
dividend distribution. Companies must maintain stable dividend payout ratio as shareholders expect it and
reveal a preference for it. As an investor, one must be aware of dividend stock for the stable profit for longer
period of time. Such stocks can act as hedges against higher-risk if there is any other risky stock in the
portfolio.