A Test Of Life Cycle Theory In The Malaysia Stock Market

Chong, Yiek Fang (2023) A Test Of Life Cycle Theory In The Malaysia Stock Market. [Final Year Project Report] (Unpublished)

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Abstract

This study is to investigate the life cycle theory of dividends in the Malaysian stock market. By using the Fama and MacBeth method, the t-statistics are computed from the time series of fitted logit coefficients to test the null hypothesis that the expected coefficient value is zero. This study covers the observation period from 2012 to 2021. In line with the life-cycle theory of dividends, the percentage of publicly traded businesses that pay dividends is high when retained earnings account for a significant portion of total assets. Based on this study, a highly significant correlation between dividend payers and RE/TA is consistently observed. We observed the asset growth rate is positive in logistic regression. Additionally, large businesses can become more profitable and grow the cash in hand. Due to Malaysia's status as a developing nation, business opportunities are primarily available to large, established firms. In contrast, the asset growth rate in the United States of America is negative, despite the positive profit of the company

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