In the modern and complex environment globalization and privatization have lead the companies to aim towards the long run objectives of maximizing shareholder’s wealth. Shareholder’s wealth is reflected in the market price of share of company’s common stock. Hence, maximizing shareholder’s wealth is possible if the price of company’s common stock is maximized. The best dividend policy is the one that maximises the company’s stock price leading to shareholder’s wealth maximization. The present study aims at identifying the relationship between dividend policy and shareholders wealth measured by MPS. Ten major companies from Indian Textile sector have been selected for this study with the data on the relevant market price and dividend policy variables for the period of  ten  years from 2006-07 to 2015-16. It is found that not only DPS but also, SIZE, REPS, LEVERAGE have significant relation with shareholders wealth for almost all the selected Companies.

KEY WORDS: MPS, EPS, DPS, PE Ratio,