Corporate Dividend Practices – A Study with Special Reference to Software Companies

Abstract

Dividend policy involves extremely important financial decisions which serves as a basis of numerous theories. However, these theories have been developed in different fields, and according to some evidence this policy remains a kind of dilemma in the financial cycles of corporations. The dividend is one form of profit sharing by a firm. Business Enterprises declare the dividends to reward the sacrifies of equity shareholders. Dividend is used as a tool to reduce the agency cost associated with the capital funds. Many factors affect the dividend policies of enterprises in India. These considerations differ across time and industry. The Dividend Decision, in corporate finance, is a decision made by the directors of a company about the amount and timing of any case payments made to the company's stockholders. The Dividend Decision is an important part of the present day corporate world. The Dividend decision is an important one for the firm as it may influence of its captial structure and stock price. In addition, the Dividend decision may determine the amount of taxation that stockholders pay. A Dividend decisions are an important aspects of corporate financial policy since they can have an effect on the availability as well as the cost of captial. The Lintnar propostions which asserts that the corporate management maintains a constant target payout ratio has been the most influential. However, the concewpts pf primary of dividends decisions as well as the reasons for it are not unambiguosly defined. There is a variety of theories which attempt to rationalize the observed secular constancy of the dividend payout ratio. The present study examines the corporate dividend practices in software companies and study based on secondary sources of data collection.