Determinants of Dividends-A Study of Indian Companies Listed in BSE 100 Index
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Abstract
This paper investigates the determinants of dividend decisions of the firms listed in BSE100 index. The impact of fundamental variables like profitability, size, risk, growth and liquidity on dividend payout is examined. Statistical techniques of correlation and regression have been used to explore the relationship between the key variables. The findings provide a strong support to the argument that profitability and risk of a firm have a significant impact on the dividend policy decisions of firms. The risk of a firm is also observed to be an important contributor in the dividend decisions and has a significant negative correlation with the dividend payout. It can also be concluded that other variables like liquidity, size and growth do not have a significant impact on the dividend decisions of BSE100 Index companies.
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