PROJECT PAPER PROPOSAL FORM
Course code: FIN667
|Name: |NOR FAZLINA BINTI HARUN | |Student ID : |2010439658 | |Email & contact no: |firstname.lastname@example.org | | |012-7187304 | |Program/Class: |BBA WITH HONOURS (FINANCE) | | |FACULTY OF BUSINESS MANAGEMENT | |Project title: |DETERMINENTS OF DIVIDEND DISTRIBUTION OF BANK IN MALAYSIA | |Supervisor: |MISS NORHASNIZA MOHD HASSAN ABDULLAH | |Supervisor’s signature: |Student’s signature: |
DETERMINANTS OF DIVIDEND DISTRIBUTION OF BANK IN MALAYSIA
NOR FAZLINA BINTI HARUN
BACHELOR OF BUSINESS ADMINISTRATION (HONS)
FACULTY OF BUSINESS MANAGEMENT
MARA UNIVERSITY OF TECHNOLOGY
13 APRIL 2012
Dividend payment is one of the most important issues that should be solve since it gives the big impact to investors of the banks to make any investment especially due to economic condition. The purpose of this study is to analyze the determinants of dividend distribution to shareholders of banks in Malaysia. The multiple linear regressions modeling approach is adopted to examine the reaction of dividend payment with 17 years sample data by using annual time series data in the period 1993-2009 that based on availability of data in data stream. This research expect that the result will be in accordance with Edward and Samuel (2011), who revealed that factors are positively correlated with dividend distribution are profitability (return on asset), leverage (debt ratio), growth (growth of interest income) and collateral capacity (total fixed asset). The Ordinary Least Squares (OLS) is used to examine these explanatory variables.
Keywords: Determinants, Dividend policy, Bank, Malaysia
1. HISTORY OF DIVIDEND
Dividend Policy is one of the main decisions in corporate finance. Dividend payment or distribution has been subject of debate in financial literature due to various researchers have their own perceptions and this topic still remain vague issue in the field of finances. However, it becomes interested topics among academicians and many researchers have developed numerous theoretical models describing the factors that managers should considers when making dividend policy decisions.
There is some basic information about dividend distribution either in conventional perspective or Islamic perspectives. Sharing the knowledge and information of Islamic Finance, Shari’ah-Compliant transaction, Islamic commercial laws and global financial issues towards establishing an ethical socially responsible has become attention among investors (Hussain, 2008).
In conventional terms, dividend represent distribution of earning to the shareholders of certain company that usually declared at Annual General Meetings and paid to shareholders of records. There have fours decision areas in finances which one of them are dividend or profit allocation decisions. The others are financing, investing and working capital management decisions. Dividend policy...