This empirical study explores the relationship between financial sustainability and dividend policy in Malaysian real estate companies. The purpose is to examine the extent to which financial sustainability influences dividend policy decisions and to identify the key factors that affect dividend policy. The study employs a quantitative research design, utilizing unbalanced panel data from 45 firms listed in Malaysian Bursa between 2012 and 2021. The findings uncovered a significant negative relationship between financial sustainability and dividend policy, which denotes financially sustainable firms are likely to pay fewer dividends to their shareholders. Similarly, the study revealed that leverage and profitability significantly affected dividend policy. The limitations include using only the real estate sector’s companies. Future research can comprise companies in other non-financial industries, financial sector, and firms or sectors of other countries. The practical implications suggest that firms should be rational and justified when making financial sustainability and dividend policy decisions and work a balance between them. Additionally, financial sustainability should be implemented as a mechanism to achieve comprehensive results. The originality of this study lies in providing insights into the key determinants of financial sustainability and dividend policy. Therefore, the findings have important implications for shareholders, managers, investors, and policymakers.
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