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Dividend Policy of Indian Corporate Firms: An abbreviation of Trends and Determinants Dr. Y. Subba Reddy1 The present breeding examines the dividend behavior of Indian corporate cockeyeds over the period 1990 2001 and attempts to formulate the observed behavior with the help of trade-off theory, and signaling hypothesis. Analysis of dividend trends for a large sample of stocks traded on the NSE and BSE sharpen that the percentage of companies paid dividends has declined from 60.5 percent in 1990 to 32.1 percent in 2001 and that only a few firms have consistently paying(a) the same levels of dividends. Further, dividend-paying companies are more than profitable, large in surface and growth doesnt seem to deter Indian firms from paying higher dividends. Analysis of influence of changes in tax regime on dividend behavior shows that the tradeoff or tax-preference theory does not see to hold true in the Indian context. establish of signaling hypothesis reinforces the earlier findings that dividend omissions have information contented about future tense earnings.

However, analysis of other non-extreme dividend events such as dividend reductions and non-reductions shows that current losses are an important determinant of dividend reductions for firms with ceremonious track record and that the incidence of dividend reduction is much more severe in the case of Indian firms compared to that of firms traded on the NYSE. Further, dividend changes appear to signal contemporaneous and lagged earnings performance rather than the future earnings performance. 1 Senior Lecturer for Finance, Curtin University of Technology, Sarawak Campus, CDT 250 98009 Miri Sarawak, Malaysia. Contact subba.y@curtin.edu.my. The views denotative and the approach suggested are of the authors and not necessarily of NSE. 1. Introduction From the practitioners viewpoint, dividend policy1 of a firm has implications for investors, managers and lenders and other stakeholders. For investors, dividends whether declared today or... If you want to get a full essay, order it on our website: Ordercustompaper.com

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