The relationship between transaction costs Of external financing and dividend Policy: evidence from Malaysia
The presence of transaction costs calls for the emphasis to be given to residual dividend policy, a policy that attempts to minimise transaction costs of external financing by accommodating capital expenditure financing requirement in companies’ dividend policy. In Malaysia, dividend increases are o...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Universiti Utara Malaysia
2008
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| Online Access: | https://repo.uum.edu.my/id/eprint/27044/1/IJMS15%201%202008%20%2071%2083.pdf |
| _version_ | 1825805580835487744 |
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| author | Ibrahim, Yusnidah Mazlan, Ahmad Rizal |
| author_facet | Ibrahim, Yusnidah Mazlan, Ahmad Rizal |
| author_sort | Ibrahim, Yusnidah |
| collection | UUM |
| description | The presence of transaction costs calls for the emphasis to be given to residual dividend policy, a policy that attempts to minimise transaction costs of external financing by accommodating capital expenditure financing requirement in companies’ dividend policy. In Malaysia, dividend increases are often perceived positively, regardless of the company’s requirement for funding future capital expenditure, and hence the extent of the influence of transaction costs on dividend policy is questionable. This study, therefore, was undertaken to examine this issue by investigating the relationship between dividend payout ratio and various proxies for transaction costs. The study found that standard deviation of return is negatively and statistically significant in influencing DPR, which indicates that consideration has been given to transaction costs since riskier companies tend to face higher transaction costs. The insignificance of other variables, however, implies that either these variables have little influence on transaction costs or that less emphasis is given by Malaysian companies in general to transaction costs relative to other factors in dividend decision-making. |
| first_indexed | 2024-07-04T06:34:38Z |
| format | Article |
| id | uum-27044 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T06:34:38Z |
| publishDate | 2008 |
| publisher | Universiti Utara Malaysia |
| record_format | eprints |
| spelling | uum-270442020-05-21T05:41:33Z https://repo.uum.edu.my/id/eprint/27044/ The relationship between transaction costs Of external financing and dividend Policy: evidence from Malaysia Ibrahim, Yusnidah Mazlan, Ahmad Rizal HG Finance The presence of transaction costs calls for the emphasis to be given to residual dividend policy, a policy that attempts to minimise transaction costs of external financing by accommodating capital expenditure financing requirement in companies’ dividend policy. In Malaysia, dividend increases are often perceived positively, regardless of the company’s requirement for funding future capital expenditure, and hence the extent of the influence of transaction costs on dividend policy is questionable. This study, therefore, was undertaken to examine this issue by investigating the relationship between dividend payout ratio and various proxies for transaction costs. The study found that standard deviation of return is negatively and statistically significant in influencing DPR, which indicates that consideration has been given to transaction costs since riskier companies tend to face higher transaction costs. The insignificance of other variables, however, implies that either these variables have little influence on transaction costs or that less emphasis is given by Malaysian companies in general to transaction costs relative to other factors in dividend decision-making. Universiti Utara Malaysia 2008 Article PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/27044/1/IJMS15%201%202008%20%2071%2083.pdf Ibrahim, Yusnidah and Mazlan, Ahmad Rizal (2008) The relationship between transaction costs Of external financing and dividend Policy: evidence from Malaysia. International Journal of Management Studies (IJMS), 15 (1). pp. 71-83. ISSN 0127-8983 http://e-journal.uum.edu.my/index.php/ijms/article/view/9865 |
| spellingShingle | HG Finance Ibrahim, Yusnidah Mazlan, Ahmad Rizal The relationship between transaction costs Of external financing and dividend Policy: evidence from Malaysia |
| title | The relationship between transaction costs Of external financing and dividend Policy: evidence from Malaysia |
| title_full | The relationship between transaction costs Of external financing and dividend Policy: evidence from Malaysia |
| title_fullStr | The relationship between transaction costs Of external financing and dividend Policy: evidence from Malaysia |
| title_full_unstemmed | The relationship between transaction costs Of external financing and dividend Policy: evidence from Malaysia |
| title_short | The relationship between transaction costs Of external financing and dividend Policy: evidence from Malaysia |
| title_sort | relationship between transaction costs of external financing and dividend policy evidence from malaysia |
| topic | HG Finance |
| url | https://repo.uum.edu.my/id/eprint/27044/1/IJMS15%201%202008%20%2071%2083.pdf |
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