The determinants of dividend policy of selected Indian textile companies

Dividend decision by any company is an important issue to be determined by the financial management. Dividend is a distribution of profit which is paid by company to its shareholders. A dividend decision of a firm is an outcome of various considerations. These considerations differ across time and industry. This study is an attempt to find out the determinants of dividend policy of selected Indian textile companies. A sample of 11 -listed Indian companies has been considered for the period from 2005–06 to 2013–14. First factor analysis is performed on the data to extract prominent factors from 16 various variables and then multiple regression is conducted on such factors. Results of factor analysis indicate that are the major 6 factors. From regression analysis on these factors, it is found that profitability and ownership structure are the most important determinants of dividend decision for selected Indian textile companies.