Dividend policy has been maintained as the top ten financial puzzles. Dividend
distribution and earnings become one of the concerns of the company’s shareholders.
In the corporate world, the dividend distribution decision is subject to management
team decision and consideration for the future prospect of the company. This research
is thus aimed at determining the impact of dividend policy on the wealth of
shareholders specializing in Malaysian top 100 listed public companies. In this
research topic, there are many studies area online. There have been a couple of
previous studies in Malaysia, including specialization in certain industries. Large
businesses are always an example for small businesses as a developing country. Thus,
this research is conducted to deliver meaningful results and broaden the company's
prospects for Malaysian knowledge. Moreover, this research is useful and gives
advantage to the policy makers, managers, investors and academicians to enhance
their understanding of the company's decision on earning distribution to shareholders.
There are various types of information provided in this research that emphasize on
dividend policy and the wealth of shareholders. In addition, this research also
addresses the background of dividend policy in Malaysia, research goal, independent
variables that have a significant impact on the shareholders’ wealth, empirical results,
major findings as well as recommendations for future research. The aim of this
research paper is to determine the impact of dividend policy on shareholders’ wealth
in the Malaysian public listed companies. The independent variables used in this
research are the dividend payout ratio, volatility earnings, and long-term debt ratio.
Shareholders’ wealth is a dependent variable that presented by earnings per share.
Secondary data was used in this research and data from the panel was used to perform
the model of regression. In this research, which began from 2012 to 2017, the total
observation of 35 companies is taken into account. The model was used by the method
of random effect. From the regression result, it found out that the dividend payout
ratio is not significant with shareholders’ wealth. Earning volatility and long-term debt
ratio is positively significant with shareholders’ wealth and earning volatility is the
major independent variables that contribute to the shareholders’ wealth.
