Dividend history and determinants in selected Indian companies: a study during 1993-'94 to 2004-'05

The study attempts to find out the trends in dividend payment and determinants of dividend decision. A sample of 607 BSE-listed Indian companies has been considered for the period from 1993-94 to 2004-05. Study results show that number of non-payers and low-payers of dividend has increased. Again, average dividend payments are on the rise continuously. It means that there is no room for moderate dividend payment. Average dividend for the past three years is the most consistent and significant determinant of dividend payment. Current profit, past profit and expected future profit have significant positive role to play in setting dividend rate. Again, cash position and cash flow has significant negative relationship with only dividend rate. Interest expenses, capital expenditure, tax ratio and share price behaviour has almost no role to play in the matter of dividend payment. That the stability of dividend is the primary concern for the managers at the time of taking dividend decision is upheld.