Corporate Dividend Policy, Minority Shareholders Right and Equity Value of Firm: Evidence from Singapore
18 Pages Posted: 27 May 2014 Last revised: 24 Apr 2020
Date Written: May 26, 2014
Abstract
Singapore -a common law origin first world country has a built-in system of reasonably adequate investors’ protection with high degree of security of property right. Consistent therewith the present paper empirically demonstrates that minority shareholders extract dividend from the firms as an outcome of legal protection in a manner that mitigates problem of expropriation by corporate insiders . Consequentially the firms follow a stable dividend policy catering to the needs of the investors with a favourable valuation implication.
Overall our study highlights that the dividend policy of Singapore firms appear to ensure protection of minority shareholders right and that, in turn, is consistent with the global ranking and perception about the country in respect of security of property right.
Keywords: Agency Cost, Dividend, Firm Value, Minority Shareholders, Legal protection, Singapore
JEL Classification: G35, G38
Suggested Citation: Suggested Citation