Corporate Dividend Policy

Corporate dividend policy is an important decision area in the field of financial management. It has both micro as well as macro significance. However, it is not clearly understood by a large segment of the financial community. It has been a subject of enquiry of financial analysts, academics and researchers for the last few decades. Despite this, the various theoretical determinants of dividend policy on the firm’s market value is a subject of long standing controversy. In this context Black (1976) epitomizes the lack of consensus by stating “The harder we look at the dividend picture, the more it seems like a puzzle, with pieces that don’s fit together.” In the present study a judgment sample of 59 companies were choosen belonging to four industries namely General engineering, Cotton, Paper and Sugar. The various dimensions examined in this study relate mainly to examine the trend of dividend behaviour of the sample companies belonging to the above four industries through the prospective of profit dividend relationships and dividend payout ratios of the sample companies and to identify and determine the relative significance of various determinants having a bearing on the dividend policy decisions of the sample companies with the use of some known regression models. It is believed that the findings of the study will be of great use to the teachers, researchers and students of commerce, economics and management personnel of various financial institutions and industrial undertakings in particular.