DIVIDEND POLICY EFFECTS ON FIRMS’ VALUE IN MALAYSIAN PLANTATION SECTOR

Abstract

Dividend policy relay information regarding the dividend decision made by the firm, and it is crucial to the shareholders and investors due to the potential impact on the value of a firm. This study aims to investigate the influence of dividend policy and firms’ value for the plantation sector in Malaysia. Thus, the determinants for dividend policy are dividend payout ratio, price earnings ratio, and earnings per share while the firms’ value is represented by Tobin’s Q. Based on a quantitative approach, 44 firms of plantation sectors listed in Bursa Malaysia from 2016 to 2019. The data were collected from the published annual reports and audited financial statements of the local plantation firms and analyzed using EViews version 10. Based on the findings, the dividend payout ratio has a negative significant relationship with firms’ value. The price earnings ratio has a negative influence on firms’ value while earnings per share have a positive influence on firms’ value. However, these relationships were reported as insignificant. This study attempts to contribute to the body of knowledge and highlights the valuable implication to the management, stakeholders, and policy makers of the plantation sector in Malaysia.