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Asian Journal of Management
Year : 2017, Volume : 8, Issue : 3
First page : ( 718) Last page : ( 722)
Print ISSN : 0976-495X. Online ISSN : 2321-5763.
Article DOI : 10.5958/2321-5763.2017.00113.5

Empirical modeling of corporate dividend policy: A study on nifty 50 companies

Dr. Majumdar Ayan*

Assistant Professor, Dept. of Management and Business Administration, Aliah University, Kolkata

*Corresponding Author E-mail: axmajumdar@yahoo.com

Online published on 22 September, 2017.


Dividend decision is one of the most important decisions in modern corporate finance. The formulation of dividend policy depends on the type of dividend policy which different financial manager decides to pursue. There are many complex factors which determine the dividend policy of a concern. The cardinal objective of the current study is to explore those factors which determine the corporate dividend decision of Nifty 50 Indexed companies. This paper studies the impact of profitability, liquidity, leverage, size, growth, free cash flow, life cycle and past dividend on dividend payout of Nifty 50 Index companies for the financial year 2005–06 to 2014–15. The present study seeks to explore how far these factors determine the dividend payment of India by using pooled and panel data regression analysis. The statistical test suggests the use of ‘fixed effect’ model. The empirical result reveals that profitability and past divided are positively and liquidity, free cash flow and growth are negatively affecting the dividend payout ratio. Leverage, Firm Size and Life Cycle failed to have any impact on the dividend payment during the study period. The findings from the study throw light on the role of several factors in designing of the dividend policy of Indian companies.



Dividend, Dividend Policy, Dividend Payout Ratio, Fixed Effect Model, Nifty.


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