摘要：The article examined the influence of dividend policy on shareholder's wealth of 75 companies listed in "Karachi Stock Exchange", for duration of six years from 2005 to 2010 using multiple regression and stepwise regression. We have used shareholder's wealth as a dependent variable which is measured as market price per share, whereas the explanatory variable dividend policy is measured as dividend per share. Furthermore we also used, Lagged Price earnings ratio, Retained Earnings and Lagged Market Value of equity as explanatory variables. Data has been collected from company's annual reports, Karachi Stock Market and State Bank of Pakistan. We have found that the difference in average market value (AMV) relative to book value of equity (BVE) is highly significant between dividend paying companies and non-paying companies. Retained earnings have insignificant influence on market value of equity. There is significant influence of dividend policy on wealth of shareholder's, as far as the dividend paying companies are concerned. Lagged Price earnings ratio did not appear to have any significant influence on dependent variable, whereas lagged market value of equity has a significant impact on market price per share
关键词：Dividend Policy; Bird in the Hand Theory; Karachi Stock Exchange.
