The three-factor model in estimating companies performance in Malaysia / Cecelia Epin

Nowadays, choosing the right model of portfolio is important to avoid errors in capital budgeting, evaluation for a portfolio and also in making any decisions towards risk analysis. Therefore, this paper study on the three-factor model in estimating companies performance in Malaysia. The three-factor model used to estimate the return on investment (ROI) for industrial product company in Malaysia. This is by considered the risk, size and also book-to-market value of the companies. All of the 154 companies with 5-years available data were taken and collected from main market of Bursa Malaysia. Panel data analysis had been used to conduct the entire test towards variables chosen-. After doing all test and analysis for the data, there is only one positive significant relationship which is book-to-market value that indicates 99 percent of significant value. Thus, this findings support study on book-to-market value in calculating returns by Jacobs (2015).