Determinants of Dividend Yield in the Case of Indian Companies

Dhanya Alex () and Aiswarya Krishnan
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Dhanya Alex: Associate Professor Department of Business Administration FISAT Business School Kochi, Kerala – 683577
Aiswarya Krishnan: Research Scholar Rajagiri Business School Kochi – 682 039

The Journal of Social Sciences Research, 2015, vol. 1, issue 6, 66-71

Abstract: The dividend policy of a firm is a major aspect of corporate financial management. It has possible effects on share prices, financing through retained profits, equity financing and gearing ratio. The present study examines the determinants of corporate dividend decision of Indian companies included in the Nifty 50 and Nifty Junior as on 1st October 2014. The data has been sourced from CMIE Prowess database.In order to identify the determinants of dividend yield, organizational variables like Age of the firm(AGE),Earnings Per Share(EPS),Market Price To Book Value Ratio(MBR),Market Capitalization (MCAP) and Debt-Equity Ratio (DER) were used as independent variables. The results of the regression shows that Market Capitalization and Earnings Per Share has significant influence on dividend decision of a company whereas others factors like Age, Market Price To Book Value Ratio and Debt-Equity Ratio did not show a significant relationship with dividend yield.

Keywords: Dividend yield; Earnings per share; Market capitalization. (search for similar items in EconPapers)
Date: 2015
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