Determinants of Corporate Dividend Policy in India - A Study of Listed IT Companies at BSE
XI Capital Markets Conference, 21-22 December 2012, Indian Institute of Capital Markets (UTIICM)
11 Pages Posted: 3 May 2013
Date Written: December 21, 2012
Dividend policy is widely researched topic in finance but still it remains a debatable issue to decide what factors determine equity dividend. This study is an attempt to empirically analyze the determinants of equity dividend of Indian Information Technology Sector. For this purpose, various key factors affecting equity dividend such as net profit after tax, lagged equity dividend, cash flow, depreciation charged, lagged net profit after tax and change in sale over the preceding two years are taken into account. A sample of ten IT companies listed at Bombay Stock Exchange (BSE) has been selected using convenience sampling for the period of five years i.e. 2007 to 2011. The empirical evidence from this study reveals that net profit after tax, cash flow and amount of depreciation charged have significant impact on the equity dividend and also good predictors of equity dividend in IT sector.
Keywords: Dividend Policy, Dividend Puzzle, Lagged Equity Dividend, Determinants
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