Tesco Dividend Policy Impact

This project examines the impact of changing dividend policies on the value of Tesco's shareholders. It explores relevant theories, analyzes data through a qualitative approach, and provides insights into the relationship between dividend policy and firm valuation. The project utilizes a case study of Tesco to demonstrate the practical implications of dividend policy decisions.

THE BUSINESS
RESEARCH PROJECT

EXECUTIVE SUMMARY
Dividend policy is always been considered as deliberate action which is done by
managers in order to distribute their portion of earning to its shareholders in the portion of share
which holds by them. Therefore, researcher will conduct its study on identifying the impact of
changing dividend policy on value of shareholders with the context of Tesco organisation. In this
work researcher will firstly develops aims and objectives in order to reach efficiently to study.
Further, appropriate research methodology will get developed so that accurate data will get
interpreted. Through the survey of questionnaire, proper analysis will get developed on gathered
information.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Background of the study.............................................................................................................1
Statement of problem..................................................................................................................1
Rationale.....................................................................................................................................1
LITERATURE REVIEW................................................................................................................2
AIMS AND OBJECTIVES.............................................................................................................2
RESEARCH METHODOLOGY.....................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5
APPENDIX......................................................................................................................................6
Time line.....................................................................................................................................6

Research Title: “ To identify the impact of changing dividend policy on value of shareholders.
A case study on Tesco”.
INTRODUCTION
Dividend policy is always been considered as deliberate action which is done by
managers in order to distribute their portion of earning to its shareholders in the portion of share
which holds by them. But it is been correct to say that over the three year changing dividend
policy has majorly been affecting the profitably of company and the earnings (Baker and
Jabbouri, 2016). Thus, the scholar has selected the issue to analyse the impact of changing
dividend policy on value of the firm with the case study of Tesco organisation. In the present
report, researcher will evaluate different perception of the authors with written journals and
articles. Further, with appropriate methodology efficient study will get developed.
Background of the study
Dividend policy refers to the particular set of rules or norms which followed by company
in order to decide amount of profit which will paid out to shareholders. However, it is correct
that choice of doing payment is been decided by the board of directors of entity. Currently, there
are numerous issues which faced by entities because of changing dividend policies (Larkin,
Leary and Michaely, 2016). The study will evaluate how the relationship between firm
performance and its stock price gets affected because of changing dividend policy which paid by
firm. In this report, a case study of Tesco will be chosen by researcher in order to analyse impact
of changing dividend policy on organisation's business operations and on its earning.
Statement of problem
Over the years it is identified that there has been continuous conflicting goals regarding
the wealth maximization of the stakeholders and on market valuation of the firm. Many scholars
have argued regarding both positive and negative impacts which have been reflected on both
firm and shareholders due to changing dividend policies. However, now also the conflict interest
of shareholders cannot get over-emphasize. Thus, present study will be developed to breach the
gap by discussing significant effect of dividend policy on share valuation of the firm.
Rationale
The reason behind choosing this research work is to enhance the academic career in
writing research paper. Present study will be conducted under the proper guidance of tutor. This
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research will help researcher to eliminate the gap of writing literature review and to improve its
academic career. Present report will also help the existing researcher in the market which will
conduct the study on same line of the topic.
Significance of the report
The present research will contribute in understanding the knowledge related to changing
dividend policy which mainly affecting value of the firms. This research work also helps to other
existing market researcher which also wants to conduct their study on same line of topic. It will
also help in increasing the academic career of the researcher and to eliminate the gap of writing
the literature review.
LITERATURE REVIEW
Literature review considered as scholarly paper under which current knowledge and
effective findings with well-known theories and ideas contributed by different authors which
have the experience of such area to topic.
According to the Bessler, Gonenc and Tinoco (2018) it is stated that under given perfect
market capital, dividend policy which is followed by the firm which not affect its value. The
argument has been developed by determining the current and future cash flows. Author has
suggested that wealth of shareholders does not affect the dividend decision and of investor too. If
cash has been needed by investor than they will easily able to create by selling their current
share. Author has given the opinion on the basis of dividend irrelevance theory which states that
policy of dividend did not have impact on stock price and on cost of capital.
On the other hand it is argued by Fitzgerald and Ryan (2019) that increases in dividend
will defiantly increase value of the firm. They also claim that higher dividend payout will also
provide opposite impact on the value of entity. According to author dividend policy will only
affect the value of firm by observing how entity viewed its policy and how they provide payment
to shareholders.
AIMS AND OBJECTIVES
Aim:
To identify the impact of changing dividend policies in the value of the firm in context
with Tesco organisation.
Objectives:
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 To determine the impact of dividend policy on shareholders' wealth.
 To articulate the effect of dividend policy on value of the firm.
 To identify theories which associate with dividend.
 To provide the suggestion to organisation on significant effect of dividend policy on
share valuation.
RESEARCH METHODOLOGY
This is the process of collecting information and data with the purpose of analysing and
making effective decision on the study upon which research has been conducted. It outlines the
methods which will be adopted by researcher in order to conduct detailed and efficient study. In
present report methods which will be selected by researcher are as follows-
Research type:
It is considered as an academic activity under which original contribution will be
provided on the existing stock of the knowledge (McCusker and Gunaydin, 2015). Generally
there are two types of research which include qualitative and quantitative.
In present report, the researcher will select qualitative research technique which will be
used to gain proper understanding of reasons, opinions and motivations which are underlying by
the scholar.
Research approach:
It is a type of plan and procedure where steps are consists with broad assumptions and
with detailed methods in order to do appropriate data collection, analysis and interpretation.
There are generally three types of research approach which include inductive, deductive and
adductive.
In present report inductive approach will be selected by researcher which is based on
some observation, pattern and theory.
Research philosophy:
It is a belief and provides a way under which scholar will gather, analyse and use
information for their research study (Boddy, 2016). It generally deals with source, nature and
development of knowledge. Generally there are four types of philosophies which include
pragmatism, positivism, realism and interpretivism.
For present study researcher will select interpretivism approach where small sample will
get analysed with proper qualitative investigation.
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Data collection:
It is a process of collecting information which is through all the relevant sources in order
to find appropriate answer of research problem and to evaluate the outcome of the study.
Generally there are two types of methods which include primary and secondary data method.
For present report, researcher will use both the methods under which scholar will use
information through already published books and with questionnaire.
Sampling:
It is a process on which part of population has been selected for conducting efficient
research study (Sampling, 2018). There are generally two types of sampling which include
probability and non probability.
For present study researcher will select non-probabilistic sampling in which each member
did not have equal chance of being selected.
Data analysis:
It is a process of applying statistical and logical techniques in order to evaluate the data
which has been collected to conduct study. There are generally three types of data analysis which
include descriptive, predictive, thematic and diagnostic.
For present report thematic data analysis will be selected which emphasize on pinpoint,
examining and in recording patterns.
Ethical consideration:
During this research project proper care will be taken by researcher in order to include
participants views and shares (Silverman, 2016). They will not be harm in any ways and in any
manner. Proper respect will be provided for the dignity of research participants and full consent
will be obtained from them.
Validity and reliability:
This research report will be evaluated with high level of reliability with the use of
appropriate methods more which is more will be for more than one time. Researcher will not
include any bias information and respondents will not be pressured in any ways.
CONCLUSION
It is summarised from the research paper that from recent past year changing dividend
policies are providing impact on overall value of the firm and on their profitability. Thus,
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researcher in this report has prepared a proposal based on which further research will get created
with the use of appropriate methods and techniques.
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REFERENCES
Books and Journals
Baker, H.K. and Jabbouri, I., 2016. How Moroccan managers view dividend policy. Managerial
Finance. 42(3). pp.270-288.
Bessler, W., Gonenc, H. and Tinoco, M.H., 2018. The effect of creditor rights on dividend payout
with changes in the information environment. Working Paper.
Boddy, C.R., 2016. Sample size for qualitative research. Qualitative Market Research: An
International Journal. 19(4). pp.426-432.
Fitzgerald, J. and Ryan, J., 2019. The impact of firm characteristics on speed of adjustment to
target leverage: a UK study. Applied Economics. 51(3). pp.315-327.
Larkin, Y., Leary, M.T. and Michaely, R., 2016. Do investors value dividend-smoothing stocks
differently?. Management Science. 63(12). pp.4114-4136.
McCusker, K. and Gunaydin, S., 2015. Research using qualitative, quantitative or mixed
methods and choice based on the research. Perfusion. 30(7). pp.537-542.
Silverman, D. ed., 2016. Qualitative research. Sage.
Online
Sampling. 2018. [Online]. Available through <https://www.studyandexam.com/sampling.html>
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APPENDIX
Time line
Activities and time scales (15 weeks)
Activities 1
wee
k
2 3 4 5 6 7 8 9 10 11 12 13 14 15
Formulati
on of
research
title
Evaluatio
n of
research
proposal
Draft of
literature
review
Develop
ment of
research
objective
s
Articulati
on of
data
collection
both
primary
and
secondar

y
8

Formulati
on of the
questionn
aire
Inserting
of data's
Applying
thematic
analysis
Use of
statistical
tool
Observati
on of
interpreta
tion
Discussio
n
Drafting
of
conclusio
n
Formatio
n on
entire file
Waiting
for
feedback
9