Dividend Policy in India: Evidence from Financial Statements

The study aims to examine the various factors of financial statements of the dividend paying Indian companies listed in stock exchange of India (Bombay Stock Exchange [BSE] and National Stock Exchange [NSE]) to examine the factors influencing dividend policy, amount of dividend and the method of dividend. Secondary data has been collected from the websites, six factors of financial statement chosen to check the impact on dividend policy. Fifteen large capital firms of three different sectors and data of fifteen years have been used in this study. Panel Unit Root Test, Fixed and Random Regression Model have been applied with the help of econometrics. Study reveals that all selected factors are also positively correlated and Solvency Ratio, Profitability Ratio and the value of the firm are affecting the dividend policy of the selected companies. The study also suggests that no universal set of data can influence the dividend policy of different companies in different sectors.