The present paper is aimed at analyzing the impact of dividend policy on shareholder wealth of oil
and gas exploration companies of Pakistan during the years from 1999 to 2006. Statistical tools are used in this
research including regression and correlation methods to ascertain best fitted model for predicting the dividend
policy impact on shareholders wealth, by taking dividend payout ratio, P/E ratio and BV/MV equity ratio as
independent variables and holding period yield as dependent variable. To determine the proportion of
explained variation in dependent variable, the coefficient of determination has been tested with the help of Ftest.
The result indicates based on historical data and statistical analysis that correlation between independent
variables and depended variable is very low for all companies showing insignificant relationship between them.