Dividend refers to a proportion of company’s earnings that is being issue to the class of the shareholder’s as decided by the board of directors. For investors , dividends help as Attractive way of investment revenue. Dividend decisions is one of the four key major functions of financial management through which the firm decides on how much to pay and how much to retain in its Net profits. Through dividend decisions companies improve their goodwill thus impacting the share prices. The cyclical relationship among profits, dividends and share value of the companies is instrumental for both companies and investors. A good and balanced dividend policy enables a company to be the face of the company at times. Owing to the importance the present study is intended to analyze the dividend policy of companies listed in BSE’s Sensex. Dividend policy is one of the important policies of organization. the present study is related to the analysis of dividend policies for the period of five years in different sectors which are listed in sensex. The present research would be useful for the financial managers of the company in formulating the dividend announcement strategies. Dividend policy is the plan of action of the company used to decide the dividend amount and date of payment.