Determinants of Corporate Dividend Policy

This paper empirically analyzes the determinants of dividend payment for the top 50 companies in terms of market capitalization, listed in the National Stock Exchange. An important aspect of the dividend policy of any corporate is the division of net current earnings after tax into dividend to be paid to shareholders and retaining the residual. Dividend declaration is a crucial decision; it influences the growth of the company through retained earnings as well as the market value of the equity shares where dividends appear to play an important role. This paper makes an attempt in this direction with the objective of analyzing dividend policy and practices in respect of selected Indian corporates. It seeks to determine the influence of the factors like net profits, liquidity and reserve position, share prices, investors' expectations, volume of sales, windfall gains etc. on the dividend decisions of corporates This study analyses that the relationship with the factors and dividend decisions of the corporates is existant or not.