Dividend Policy and Firm Value in Indonesia: The Moderating Role of Capital Structure

Vriska Mega Pratiwi, Anggita Langgeng Wijaya and Ratih Paramitasari
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Vriska Mega Pratiwi: Universitas PGRI Madiun, Indonesia
Anggita Langgeng Wijaya: Universitas PGRI Madiun, Indonesia
Ratih Paramitasari: Universitas Terbuka, Indonesia

CECCAR Business Review, 2022, vol. 3, issue 3, 62-72

Abstract: This study aims to examine the effect of dividend policy on firm value with capital structure as a moderating variable. The research was conducted on manufacturing companies on the Indonesia Stock Exchange in 2016-2019. The purposive sampling technique took the research data. Data analysis used a moderated regression analysis. The findings of this study indicate that the dividend policy increases firm value. However, this analysis demonstrates that the capital structure has a moderating influence on the effect of dividends on firm value. Investors in Indonesia’s capital market have reacted positively to manufacturing businesses’ dividend payout policies. However, if the company’s capital structure is highly leveraged, this reaction will be diminished.

Keywords: firm value; capital structure; dividend; risk; shareholders (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ahd:journl:v:3:y:2022:i:3:p:62-72

DOI: 10.37945/cbr.2022.03.08

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