Abstract:
Dividend policy is one of the most controversial and the most debatable issues in the corporate
finance literature and still keeps its prominent place in developed and emerging markets. This
research aims to examine the factors which affect dividend policy for listed Beverage food and
Tobacco companies in Sri Lanka. In particular, the research examines the extent to which firm
characteristics affect corporate dividend policy for the period from 2008 to 2011. This study explains
the impact of Firm characteristics such as firm size, profitability, leverage and tangibility on dividend
policy. Pearson’s correlation and multiple regression models are used to analyze the data.
Based on the sample of 10 listed Beverage Food and Tobacco companies, it is found that some of the
Firm characteristics have influenced more on the dividend policy decision among listed Beverage
Food and Tobacco companies in Sri Lanka. The results reveal that firm size and profitability have a
positive impact on dividend policy. Further, leverage has a negative impact on dividend policy.
