The Impact of Dividend Policy on Shareholders' Wealth Based on Agency Cost and Residual Dividend Theory

This study attempts to shed light on dividend policy for Malaysian companies by seeking to understand the explanations for corporate dividend policy's effect on shareholder's wealth (Market Price Share), for the year 2007 to 2009, with the focus on Agency Cost Theory and Residual Theory. T...

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Main Author: Siad, Ahmed Abubakar Ahmed
Format: Thesis
Language:eng
eng
Published: 2010
Subjects:
Online Access:https://etd.uum.edu.my/2481/1/Ahmed_Abubakar_Ahmed_Siad.pdf
https://etd.uum.edu.my/2481/2/1.Ahmed_Abubakar_Ahmed_Siad.pdf
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spelling my-uum-etd.24812013-07-24T12:16:13Z The Impact of Dividend Policy on Shareholders' Wealth Based on Agency Cost and Residual Dividend Theory 2010-10-17 Siad, Ahmed Abubakar Ahmed Ibrahim, Yusnidah College of Business (COB) College of Business HG Finance This study attempts to shed light on dividend policy for Malaysian companies by seeking to understand the explanations for corporate dividend policy's effect on shareholder's wealth (Market Price Share), for the year 2007 to 2009, with the focus on Agency Cost Theory and Residual Theory. Three variables associated with Residual Theory namely Size, Growth opportunity (GO) and Capital expenditure (CAPEX) and two variables associated with Agency Cost Theory, namely Leverage (LEV) and Free cashflow (FCF) are the focus of the study where their interaction effect with Dividend Per Share (DPS) are hypothesised to have significant effect on share price. Earnings per share (EPS), Exachange rate (EXR) and Inflation (INF) are used as control variables. Results show that the interaction variables between DPS and CAPEX, DPS and Growth Opportunity have significant influence on share price but in the direction opposite to that hypothesized under Residual Dividend Policy. Nevertheless, the interaction effect between DPS and Size is also significant in influencing share price in the manner predicted by Residual Dividend Policy. Variable associated with agency Cost Dividend Theory are shown not to play a significant mediating role in the relationship between stock price and DPS. 2010-10 Thesis https://etd.uum.edu.my/2481/ https://etd.uum.edu.my/2481/1/Ahmed_Abubakar_Ahmed_Siad.pdf application/pdf eng validuser https://etd.uum.edu.my/2481/2/1.Ahmed_Abubakar_Ahmed_Siad.pdf application/pdf eng public http://lintas.uum.edu.my:8080/elmu/index.jsp?module=webopac-l&action=fullDisplayRetriever.jsp&szMaterialNo=0000768362 masters masters Universiti Utara Malaysia
institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Ibrahim, Yusnidah
topic HG Finance
spellingShingle HG Finance
Siad, Ahmed Abubakar Ahmed
The Impact of Dividend Policy on Shareholders' Wealth Based on Agency Cost and Residual Dividend Theory
description This study attempts to shed light on dividend policy for Malaysian companies by seeking to understand the explanations for corporate dividend policy's effect on shareholder's wealth (Market Price Share), for the year 2007 to 2009, with the focus on Agency Cost Theory and Residual Theory. Three variables associated with Residual Theory namely Size, Growth opportunity (GO) and Capital expenditure (CAPEX) and two variables associated with Agency Cost Theory, namely Leverage (LEV) and Free cashflow (FCF) are the focus of the study where their interaction effect with Dividend Per Share (DPS) are hypothesised to have significant effect on share price. Earnings per share (EPS), Exachange rate (EXR) and Inflation (INF) are used as control variables. Results show that the interaction variables between DPS and CAPEX, DPS and Growth Opportunity have significant influence on share price but in the direction opposite to that hypothesized under Residual Dividend Policy. Nevertheless, the interaction effect between DPS and Size is also significant in influencing share price in the manner predicted by Residual Dividend Policy. Variable associated with agency Cost Dividend Theory are shown not to play a significant mediating role in the relationship between stock price and DPS.
format Thesis
qualification_name masters
qualification_level Master's degree
author Siad, Ahmed Abubakar Ahmed
author_facet Siad, Ahmed Abubakar Ahmed
author_sort Siad, Ahmed Abubakar Ahmed
title The Impact of Dividend Policy on Shareholders' Wealth Based on Agency Cost and Residual Dividend Theory
title_short The Impact of Dividend Policy on Shareholders' Wealth Based on Agency Cost and Residual Dividend Theory
title_full The Impact of Dividend Policy on Shareholders' Wealth Based on Agency Cost and Residual Dividend Theory
title_fullStr The Impact of Dividend Policy on Shareholders' Wealth Based on Agency Cost and Residual Dividend Theory
title_full_unstemmed The Impact of Dividend Policy on Shareholders' Wealth Based on Agency Cost and Residual Dividend Theory
title_sort impact of dividend policy on shareholders' wealth based on agency cost and residual dividend theory
granting_institution Universiti Utara Malaysia
granting_department College of Business (COB)
publishDate 2010
url https://etd.uum.edu.my/2481/1/Ahmed_Abubakar_Ahmed_Siad.pdf
https://etd.uum.edu.my/2481/2/1.Ahmed_Abubakar_Ahmed_Siad.pdf
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