Determining the relationship of financial leverage on return on equity in Malaysia : empirical evidence from Bursa Malaysia / Anas Abdul Imam Basirun

The purpose of this project paper is to determine the relationship between financial
leverage and return on equity in Malaysia, with empirical result. This study selects 30 listed
company in Bursa Malaysia randomly for the quarterly period 2014 - 2018. The method used
in this project paper is unit root test and diagnostic check to get unbiased result. This study
adopted both descriptive and descriptive analysis in describing the data set and in
investigating the relationship between financial leverage and return on equity. Findings
from the regression analysis reveal the insignificant relationship between financial leverage
and return on equity in Malaysia. The regression result reveals that debt ratio has positive
relationship on return on equity while debt equity ratio and interest coverage ratio reveal
negative realtionship to return on equity.