T H E E F F E C T O F F I N A N C I A L L E V E R A G E T O W A R D S D I V I D E N D P A Y O U T R A T I O . E M P I R I C A L E V I D E N C E O F
M A L A Y S I A : P R E , D U R I N G A N D P O S T G L O B A L F I N A N C I A L C R I S I S
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F A C U L T Y O F B U S I N E S S A N D M A N A G E M E N T U N W E R S I T I T E K N G L O G I M A R A
K O T A K I N A B A L U S A B A H
A C K N O W L E D G E M E N T
Here, I would like to say thank you to our advisor, Pn. Anastasiah binti Harbi for helping me to complete the research by giving an advice, guidance and support to me along my way in completing the final project paper. I would like to say thank you too to Dr. Abdul Aziz Karia for giving me a knowledge regarding about the research which I need the most and give me a chance to learn about research.
Lastly, I would like to say thank you to my parents for always supporting me along my way in completing my final project paper. Not forget to mentions to my friend which also give me a guidance in completing my final project paper.
T A B L E O F C O N T E N T S
T I T L E P A G E i D E C L A R A T I O N O F O R I G I N A L W O R K ii
L E T T E R O F S U B M I S S I O N iii
D E C L A R A T I O N iv A C K N O W L E D G E M E N T v
T A B L E O F C O N T E N T S vi-viii L I S T O F F I G U R E S viii L I S T O F T A B L E S ix-xi L I S T O F A B B R E V A T I O N S xii
A B S T R A C T xiii
C H A P T E R 1 I N T R O D U C T I O N
1.0 Research Background 1-3 1.1 Problem Statement 4-5 1.2 Research Objectives 5 1.3 Significant of Study 5-6 1.4 Research Question 6 1.5 Limitation O f Study 6
C H A P T E R 2 L I T E R A T U R E R E V I E W
2.0 Introduction 7 2.1 Theories associated with study 7-12
2.2 Literature Review 12-14 2.3 Summary of Previous study 15
2.4 Conceptual Framework 16
2.5 Conclusion of Literature Review 17
C H A P T E R 3 D A T A AND M E T H O D O L O G Y
3.0 Introduction 18
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3.1 Scope of Study 18-19 3.2 Variable Definition 19-20 3.3 Empirical Model 20-21 3.4 Estimation Procedure 22-24 3.5 Diagnostic Check 24-25 3.6 Research Hypothesis 26-27 3.7 Research Flow 28 3.8 Summary of Chapter 29
C H A P T E R 4 F I N D I N G AND A N A L Y S I S
4.0 Introduction 30 4.1 Pre Global Financial Crisis
4.1.1 Descriptive statistic 30-31 4.1.2 UnitrootTest 31-32 4.1.3 Poolability Test 32 4.1.4 Regression Test 32-33 4.1.5 Correlation Coefficient 34
4.1.6 Diagnostic Check 34-35 4.2 During Global Financial Crisis
4.2.1 Descriptive statistic 36-37 4.2.2 Unitroot Test 37 4.2.3 Poolability Test 47-38 4.2.4 Regression Test 38-39 4.2.5 Correlation Coefficient 39 4.2.6 Diagnostic Check 39-40
4.3 Post Global Financial Crisis
4.3.1 Descriptive statistic 41 4.3.2 UnitrootTest 42
A B S T R A C T
The main aim of this paper is to examine whether the financial leverage help the finn in Malaysia to pay dividend during the global financial crisis. A s being stated by Kania and Bacon (2005) where they find a result of financial leverage or debt were used by the company in order to pay dividend pay-out ratio. Other than that, this study also wants to look at the relationship between financial leverage and dividend pay-out ratio Pre, During and Post global financial crisis. It is also wants to examine the pattern of company paying the dividend in these three economic phase. The data is run by using multiple regression where we want to see whether the independent variable bring a significant effect towards the dependent variable. For the result, it is found that only the Leverage of Pre global financial crisis has a significant effect dividend pay-out ratio
