Determinants of dividend policy of select companies in Indian cement industry-A structural equation modeling Dr. Gowri K.*, Dr. Saravanan R.** *Faculty in Commerce with Computer Applications, PSG College of Arts and Science College, Coimbatore **Director, Holy Grace Academy of Management Studies, Kerala Online published on 20 May, 2017. Abstract Dividend policy plays an indispensable role because it determines what funds flow to investors and what funds are retained by the firm for future reinvestment. It affects firm value as a result of distributing the output from investment and financing decision to stockholders. Dividend can also provide important information to the stockholders regarding the firm's performance; This is referred to as a signaling effect. Through the signaling effect managers are subject to the pressure form capital market that they have to pay optimal amount of dividend to stockholders, and this mechanism plays the role of monitoring managers, and therefore, solving what's called agency problem; Dividend policy is a one of the most debated topics and a core theory of corporate finance which still keeps its prominent place. The present study deals with the main objectives to analyze the dividend determinants of Select Companies in Indian Cement Industry. A sample of twenty three cement companies listed at Bombay Stock Exchange (BSE) has been selected on the basis of continuously paid dividend during the study period of ten years from 2003–2004 to 2012–2013. For this purpose, various key factors affecting equity dividend have been taken such as Earnings per share Dividend per share, Age of the firm, Size of the firm, Growth of the firm, Tangibility of the firm, Debt equity ratio, Operating profit ratio, Net profit ratio, Net profit to Net worth ratio, Dividend Payout ratio and Operating cost ratio. And also inferred that the regression coefficient of the exogenous variables with the critical ratio of all the manifest variables are above the table value of 2.962 and it is significant at 1 percent level except TANG and DPR. Among the selected variables ten variables are the most influenced factors to determine the dividend policy of select companies in cement industry. Top Keywords Dividend policy, Determinants of dividend, Cement Industry and Structural Equation modeling. Top |