An Empirical Study of the Determinants of Dividend Policy in India
The objective of the study is to analyse various factors affecting the dividend policy of firms listed on the BSE and obtain empirical evidence of them. The study included factors such as Price/Earnings ratio, Age of the firm, Liquidity, Profitability, Firm Size, and Investment opportunity.
The total number of samples is 146 companies listed on the BSE 200 for the period of 2015 to 2021. The entire hypothesis has been tested using multiple regression analysis. The results show that dividend policy in Indian companies is positively affected by investment opportunity, whereas it is negatively affected by liquidity and age. On the other hand, there is no significant relationship of dividend policy with Firm size, Price Earnings ratio and Profitability. The findings of the study enable the companies to determine an appropriate dividend policy that helps the company in future growth and protects the investor's interest. It uses a large dataset from developing countries.