Τhe main purpose of this dissertation is to provide the variety of the theoretical models of dividend policy and to describe the major that factors that affect it such as liquidity or restrictions to loan contracts . Moreover, the Greek institutional environment in which a company distributes dividend to its shareholders is presented in this context. Also, the study makes an attempt to apply the reasons for paying large or small dividends and emphases in the meaning of signaling. By demonstrating it’s profitable in this manner, the firm can differentiate it from less profitable firms. However, there are many ways for the stockholders of a firm to take cash out without receiving dividends. Finally, the earnings of a firm have a significant effect on how investors interpret a dividend change, further research will be necessary to determine the cause of this interaction.