Harmanpreet Kaur
Dr. Rajinder Kaur
Abstract
Dividend decision is a challenging task for the management of a company as it is one of the factors affecting the firm’s performance. The present research has been undertaken to study the impact of dividend policy on the Return on Equity (ROE) and Return on Asset (ROA) of a few selected corporate sectors. For this purpose, 186 companies listed on the National Stock Exchange (NSE) paying a regular dividend for the period of 12 years i.e. 2010 to 2021 have been considered as the sample for data analysis. The data has been analyzed by applying Panel data regression models namely the fixed effect model and random effect model. Further, the Hausman test has suggested that the Random effect model is appropriate as compared to the fixed effect model. The study found a significant effect of dividend policy on firm performance which implies that by increasing the cost of dividends per share of the selected companies, the Return on Equity and Return on Assets would also increase. So,the study will be useful for the companies while framing their dividend policy.
Keywords- Dividend policy, Return on Assets (ROA), Return on Equity (ROE), Panel Regression