Factors Influencing the Dividend Announcement and Segmentation of Investors: From Investors Perspective

Abstract

The study is attempted to find out factors determine the dividend announcement. For this purpose, mean analysis is used to identify the most and least factors. Primary data is taken in this analysis. Data is collected by using structured questionnaire from individual investors who are invested in equity market. Statistical tools such as exploratory factor analysis is used to reduce the number of factors and make the factors more meaning full, cluster analysis is used to segment the investors and discriminate analysis is used to check the validity of the segmentation of investors. The study finds that liquidity and solvency position are important determinants of dividend announcement. In addition to, factor analysis is segregated the nine statements into four meaningful factors such as profitability, liquidity management and environment. The study also finds that the investors are classified into three clusters such liquidity cluster, high positive cluster and management cluster and there is a significant difference among such clusters. Finally it concludes that liquidity cluster, high positive cluster and management cluster are correctly classified with 100 percent, 96.6 percent and 83.6 percent respectively and overall classified by 96.6 percent.