The Effect of Dividend Policy On Company Value with Profitability as A Moderation

Fisca Mawa’ Pangraran () and Syarifuddin Rasyid
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Fisca Mawa’ Pangraran: Hasanuddin University
Syarifuddin Rasyid: Hasanuddin University

A chapter in Proceedings of the 9th International Conference on Accounting, Management, and Economics 2024 (ICAME 2024), 2025, pp 479-489 from Springer

Abstract: Abstract In addition to analyzing the moderating effect of profitability, this study aims to investigate the relationship between dividend policy and the valuation of companies in Indonesia’s consumer cyclical sector. In reaction to changes in economic cycles and consumption patterns, the consumer cyclicals sector displays a variety of characteristics. To completely comprehend the relationship between dividend policy and firm value, a more thorough investigation is required. profitability, and company value. This quantitative study centers on the population of consumer cyclical firms listed on the Indonesia Stock Exchange from 2019 to 2023, with a particular emphasis on the dividend payout ratio, which serves as an indicator of dividend policy, Tobin’s Q, which indicates firm value, and return on equity, which measures profitability, are the research variables. To investigate the influence and moderating function of profitability, a moderation regression analysis is utilized. The results show that dividend policy raises the value of the company. Furthermore, profitability not only has a favorable impact but also strengthens the bond between business value and dividend policy. This result emphasizes how important it is to include profitability factors in consumer cyclical enterprises’ dividend policies. This study shows that a company’s value is influenced by both its dividend policy and its profitability in Indonesia’s consumer cyclical sector.

Keywords: Dividend Policy; Firm Value; Profitability; Consumer Cyclicals (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-758-8_40

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DOI: 10.2991/978-94-6463-758-8_40

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