Explain the theory that is applicable

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Based on Bursa Malaysia filings, the large caps - companies with market capitalisation of at least RM2 billion - had slashed their aggregate dividends payment by 31% to RM3.39 billion for the first quarter this year (1Q2020) compared with RM4.91 billion in 1Q2019. An analysis that included the top 100 companies showed that shareholders have seen a net reduction of RM1.52 billion in dividends for 1Q2020. Dividends slashed amounted to RM1.7 billion while higher dividend payouts amounted to only RM179.87 million.

Problem 1:
Based on your understanding of dividend theories, explain the theory that is applicable to explain the above scenario.

Reference no: EM132928809

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