Determinants of Dividend Policy
Keywords:
Dividend Distribution, Financial Leverage, Age, Size of Company, EPS, Net Cash Flow, Current RatioAbstract
The dividend distribution decision is one of the key components of corporate policy and has thus been an issue of interest to investors and researchers alike. Several studies have been attempted, resulting in many different theoretical and empirical explanations for the rationale behind dividend decision. However, the findings have been debatable, leading to no firm conclusion as to what determines the dividend policy.
The present research attempts to study the impact of earnings per share, financial leverage, maturity of Indian businesses, Net cash flow for investment, current ratio and total assets on dividend payments. Companies listed on Nifty 50 Index of the National Stock Exchange have been analysed using Correlation and Regression Models to conclude that Earnings per share and Net Cash Flow play a significant role in predicting the Dividend Payment patterns of Indian businesses.
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