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Characteristics of Firms Going Private in the Malaysian Stock Exchange

  • Pei Ling Lee

    ()

    (Faculty of Business and Law, Multimedia University, Malaysia)

  • Roy Wye Leong Khong

    ()

    (Nottingham University Business School, University of Nottingham, Malaysia)

  • Suganthi Ramasamy

    ()

    (Faculty of Business and Law, Multimedia University, Malaysia)

The study empirically investigates the financial characteristics that discriminate firms that went private and firms that remain publicly traded. Based on the results of logit and probit model, companies that reverted to the private domain are characterized as having higher cash balance, higher degree of undervaluation, higher operating profit margin, lower dividend payout rate, and lower free float compared to public counterparts. The classification accuracy rates for in-sample and holdout sample are 69.17% and 65.38% respectively.

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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 30 (2010)
Issue (Month): 2 ()
Pages: 1307-1319

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Handle: RePEc:ebl:ecbull:eb-09-00775
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