1. IntroductionDividend policy for a company means whether to pay or not to pay; whether to pay in cash, in shares, or in both cash and shares, and how often to pay. Why do companies pay cash dividends when they see a decline in their earnings? Why not buy back shares? Why not the stock dividend? To examine this aspect of the research, the research will evaluate the behavior of companies in distributing cash dividends in light of different ownership structures that present trading restrictions. Companies listed on the Karachi Stock Market (KSE) have been chosen to evaluate the issue. The KSE is a developing market in the region without a robust regulatory framework. There is a shortage of management talent in publicly traded companies. Therefore, it is reasonable to say that, compared to companies listed in the developed markets of the United States and Europe, companies listed on KSE generally do not observe good corporate governance practices. Furthermore, good corporate governance is required to protect shareholders from the negative effects of non-tradable shares owned by directors and their spouses, financial institutions and external block holders. This study includes only poor performing firms to reduce the signaling effects of cash dividends. (John and Williams (1985); Miller and Rock (1985)) and will focus on the effect of corporate governance through cash channeling of dividend payments. Whenever a company's earnings decline, cash dividend payments do nothing to ensure long-term profit growth. The advantage of using poorly performing firms for the study will be to reduce and neutralize the signaling effects of future earnings growth through the payment of cash dividends by good performing firms (Benartzi, Michaely, and Thaler (1997) and DeAngelo, DeAngelo,.... .. half of the sheet ......1 Fin_ins + β2 FCF_Assets + β3 EPS + β4Dt_Assets + β5 ROA + β6 Size + εit (1b)CDiv_Assets = α + β1 Block_own + β2 FCF_Assets + β3 EPS + β4 Dt_Assets + β5 ROA + β6 Size + εit (1c)CDiv_Assets = α + β1 Non-tradable + β2 FCF_Assets + β3 EPS + β4 Dt_Assets + β5 ROA + β6 Size + εit (1d) In regression models, we have four key independent variables i.e. Director Ownership, Financial Institutions Ownership, Block Holders Ownership and Non-Tradable Shares to examine the relationship with the dependent variable: Cash Dividends versus Assets But there are some other variables which also influence the behavior of a company's cash dividend distribution In fact, the study includes such variables in the model. The control variables are Debt/Assets, Free Cash Flow per Share, Free Cash Flow per Assets, Earnings per Share, Company Size, and Return on Assets..