An empirical analysis of dividend payout: evidence from plantation companies listed in Bursa Malaysia / Siti Athira Saharuddin

If company earned profits the management is either paying out dividends or retained the profits. The objective of this present study is to empirically investigate which factors that significantly influence company's dividend payout in the case of Malaysia's plantations sector. To further investigate what factors determine the dividend payout decision, five main factors that have been considered throughout this study which are profitability, liquidity, leverage, firm size and sales growth. Twenty three plantations company that listed in Kuala Lumpur Stock Exchange has taken into account with the 8 years period of study from 2008 until 2015. The total observations included in this research sample is 184. Pooled regression analysis used to determine the sign of coefficient and define whether independent variables are statically significant towards dividend payout or vice versa. Test on assumptions that have been carried out was normality test, where the probability value of Jarque-bera quantify the normality of error term. Each independent variables are proxied by return on equity (profitability), current ratio (liquidity), debt to equity ratio (leverage), logarithm of total asset (size) and growth of sales (growth). By employing the econometrics and statistical test, it found out that liquidity, leverage and firm size are the most significant factors in determining the company's dividend payout decision in the case of Malaysia's plantations sector. Meanwhile profitability and sales growth revealed to be insignificant to dividend payout behavior.