The dividend decision of a public listed company is vital for its various stakeholders as it is considered a yardstick to judge the financial performance of a company and its earnings generating capacity. However, the existing theoretical framework and previous empirical research relating to the effect of dividend decision on the firm's financial performance do not indicate a straightforward cause and effect relationship between the two. The present study examines the impact of dividend decision on company performance by taking a sample of listed companies on Nifty 50 index for the period 2013-14 to 2020-21. The technique of panel data regression with Pooled Least Square Estimation, Fixed Effects Model and Random Effects Model is adopted to examine the said relationship empirically. The study results find support for relevance theories, specifically bird-in-hand and signalling theory. The results establish a positive impact of dividend payment on company performance. The study results will be helpful for finance managers in determining dividend policy and for investors for making apt investment decisions.