The determinants of dividend policy on dividend distribution in Malaysian public listed companies / Emma Nur Atiqah Mohd Anuar

The latest issues on authorizing the dividend policy, if they do not pay cash dividends to the shareholders, companies were bound to the risk being punished. It is not only a dividend policy on profits that warrants attention. Some listed companies with huge cash piles are also stingy in distributing them. The existence of MCCG 2017 hints dividend policy ignorance is a silent problem that should not be ignored by the board as it is part of the governance of the organization. Therefore, corporate dividend policy directly influences the companies’ value and the shareholders’ wealth. Previous literature reviews documented that dividend policy is a controversial, debatable, arguable, ambiguous, an unsolved puzzle topic. Simply put, dividend distribution is a corporate governance problem. The main objectives of this study were to determine the factors influencing dividend distribution among Malaysian public listed companies’ in the consumer products sector. The quantitative design method was used where a sample of 113 companies in Malaysia were selected. The dividend irrelevance theory set the foundation for the investigation. In addition, the data analyses employed descriptive analysis, correlation analysis and multiple regressions in determining the impact of leverage, liquidity, company size, and profitability on dividend policy in the consumer products industry over a period of five years from 2013 to 2017. The empirical results of this study show that leverage, company size, and profitability have a positive relationship with dividend distribution. Meanwhile, liquidity has a negative relationship with dividend distribution. The results of the analysis showed that company size and profitability were the major factors that affected dividend distribution decision. The board of directors of the PLCs should use the dividend payouts rate as a company-monitoring indicator where large retention of earnings would encourage behavior by the managers that do not maximize shareholder value.