A panel data analysis: an assessment of dividend policy and Malaysian stock market prices / Mohd Ebdazief Abrahim @ Ebrahim

There's a lot debating about dividend policy and stock policy. Dividend policy is the set of guidelines a company uses to decide how much of its earnings it will pay out to shareholders. Miller and Mogdigliani (1961) suggests that investors are not concerned with a company's dividend policy since they can sell a portion of their portfolio of equities if they want cash. This evidence is called the "Dividend Irrelevance Theory." and it essentially indicates that an issuance of dividends should have little to no impact on market price. On the other side. Gordon (1963) suggests that there are investors that is concerned about the company's dividend policy. This is called as the "Dividend Relevance Theory" which explain that the issuance of dividends have significant impact on market price. This paper will examine whether the Dividend can influence Market Price by coasidering four controlling the variable likes Earnings per Share. Return on Equity and Retention Ratio. A sample of 30 companies listed in Bursa Malaysia is taken from period of 2004 to 2013. Fixed. Random effects and Pooled OES has been applied on panel data to found the relation of Dividend towards Market Price. Result found that only Earnings per Share has significant positive relation towards the Market Price.