On May 11, 2016 , the management of Oracle Financial Software Services (OFSS) , a subsidiary of multi-national technology company Oracle Corporation, announced an annual dividend (For 2015-16, year ending March 31) of Rs.100 per share on shares with a face value of Rs.5. After the dividend was announced, the share price fell from Rs. 3,500 on May 11, 2016 to Rs. 3,418 by May 17, 2016. (Refer to Figure-I for Stock Performance of OFSS before and after the announcement of Dividend).

This left the company wondering whether the decline was due to the lower dividend paid compared to the previous year (It had paid a dividend of Rs.180 the previous year apart from an interim dividend of Rs.485). Probing into the factors that had affected the market price of the share, OFSS started analysing the reasons for the decline in share price and contemplated about the dividend to be paid in the next financial year 2016-17. . ..

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