DIVIDEND POLICIES AND ITS IMPACT ON FINANCIAL PERFERMANCE OF CORPORATES: WITH RESPECT TO INDIAN INFORMATION TECHNOLOGY COMPANIES

The analysis of various dividend-related ratios indicates that the dividend payment patterns of the sample companies are irregular and exhibit a skewed distribution, suggesting the absence of a consistent dividend policy. Furthermore, the correlation matrix reveals a very weak positive relationship between the Dividend Payout Ratio (DPR) and the Price-to-Earnings (P/E) Ratio, which is statistically significant at the 5 percent level. Similarly, Earnings per Share (EPS) demonstrates a weak but positive association with both Return on Assets (ROA) and Return on Equity (ROE), with these relationships being significant at the 1 percent level. In addition, a strong positive correlation is observed between ROE and ROA, which is also statistically significant at the 1 percent level, indicating a close relationship between these two profitability measures. In this study two regression models were also used (i) Model I: ROA c DPR PER EPS and (ii) Model II: ROE c DPR PER EPS. The random effect regression model is adequate because both models' results were significant. It is possible to draw the conclusion that the dividend policy of businesses in the information technology sector is significantly influenced by the firm's performance.

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