Maximizing the long-term shareholders’ wealth by providing a stable dividend payment is always a goal of the firm. The dividend policy has several implications that affect both parties, shareholders, and the firm. The management wishes to strike a balance between the interest of shareholders and the firm’s sustainability for future growth and earnings stability. Under the signaling theory, dividend policy signals good news to investors and impacts share price. However, debates on whether dividend policy signals good or bad news and its varying effects have long been discussed. This paper aims to determine whether dividend policies affect shareholders’ wealth and firm performance in Malaysian Public-Listed Companies (PLCs). This study measured dividend policy through dividend per share and dividend yield. Meanwhile, the share price is used to measure a shareholders’ wealth, and firm performance is measured by lagged return on equity. The data was selected from the top 60 Malaysian PLCs traded in Bursa Malaysia for a period of eleven years, starting from 2010 to 2020. The study used Pearson’s correlation coefficient analysis and multiple linear regression analysis. The findings revealed mixed results where the dividend per share has a significant positive relationship whilst the dividend yield has a significant negative relationship with the share price. A positive significant relationship exists between dividend policy on lagged ROE. This study contributes useful insights to the debates on the effect of dividend decisions and their impact on the share price and firm performance in emerging markets, particularly in Malaysia.