An Analysis of Factors for Dividend Payment-Study of NIFTY Dr. Sharma Dinesh K R*, Wadhwa Ritu** * Assistant Professor, Gautam Buddha University, Greater Noida ** Assistant Professor, ABS-Amity University, Noida Online published on 27 February, 2017. Abstract Dividend decision is considered one of the critical decision areas in the field of finance. Dividend Policy is the set of guidelines a company uses to decide how much of its earnings it will pay out to its shareholders. Dividend Policy refers to the explicit or implicit decision of the Board of Directors regarding the amount of residual earnings (past or present) that should be distributed to the shareholders of the corporation. In this review, we attempt to identify the leading factors that determine the dividend behavior in the corporate finance and investigate the impact of firm specific characteristics such as Size, Growth, Control, Liquidity, Investments and Dividend tax etc. on dividend decision of Indian Companies, listed on NIFTY. This study incorporates exploratory factor analysis and regression analysis to analyze the data. It is found that the sample companies during the period of study have shown an increasing trend in dividend paid continuously. Average profit After Tax of the sample companies had also shown an increasing trend. The correlation analysis reveals that dividend rate is consistently and positively correlated with the expected future earnings and Ownership by promoters and is negatively correlated with current earnings, past year earnings, pattern of past dividends, and Cash position of the company, cash flow, size and ownership of non-promoters. The regression analysis reveals that Cash flow and Ownership (non-promoters) have been statistically insignificant. Rest of the variables Current Year's Earnings After Tax, Past Year's Earnings After Tax, Expected Future Earnings, Cash Position, Cash Flow During The Year, Pattern of Past Dividends, Size of Company and Ownership (promoters) are significant. Top Keywords Dividend, correlation analysis, regression analysis. Top |