Purpose: The purpose of this paper is to shed light on the ongoing debate of dividend policy, which is considered one of the most controversial topics in corporate finance literature. Design/methodology/approach: The paper provides a survey of literature; it, first, outlines the main theoretical arguments of dividend policy and then critically discusses the most important and influential previous empirical studies in the dividend literature. Findings: The analysis of literature review detects that no general consensus has yet been reached after many decades of investigation, despite extensive debate and countless research. Consequently, the main motivation for paying dividends is still unsolved and thus remains as a puzzle. In addition, there is no doubt that carrying the dividend debate into the context of emerging markets attaches more pieces to this puzzle. Originality/value: This paper offers an updated and more comprehensive survey of literature by examining the relationship between theory and practice from both developed and emerging markets.