Identifying and understanding the determinants of dividend policy is of high concern among the stakeholders. It will help them not only to examine ability of companies to pay dividends but also to predict its future behavior and trend. Financial researchers have set out a series of theories in this regard; "Growth Effect", "Agency Cost", "Size Effect" and "Risk Factor" are some examples. In addition to the existing theories that are presented in earlier papers, we have tried to take Iranian's firms state of affairs into consideration. In this research, required data of 63 firms for a 6-year period was gathered and tested via multivariate regression analysis method.
Results show that dividend policy of the firms follows a "Random walk", which is consistent with signaling theory; i.e., those firms that had high (low) dividend yields in the last year will have high (low) dividend yields in the current year, as well. Size, investment opportunity, risk and financial leverage and structure are other factors that can explain the dividend policy of firms. Presence of these factors in the research general model shows an about 50% explanatory power.
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