FUNDING DECISIONS, DIVIDEND POLICY, AND FIRM VALUE IN INDONESIA

Yosiv Phenardi, Arif Budi Satrio

Abstract


Funding decisions and dividend policy are topics that academics have massively studied. Nevertheless, this topic is still important to be investigated by considering the inconsistency of results and the crisis period in which firms are faced with high uncertainty. This study examines the two functions of financial management in shaping firm value by taking samples of all food and beverage firms in Indonesia that pay dividends consecutively for the 2016-2020 period. The test results with robust panel regression show the failure of leverage in predicting changes in firm value. Nevertheless, dividend policy still has an important role. The public seems to believe in giving firms with good financial performance signals. The test results are robust in a series of tests. As a result, this research is helpful for academics, managers, and regulators, especially in ensuring that firms are back in business.

Keywords


funding decision; capital structure; dividend policy; firm value; emerging market

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DOI: http://dx.doi.org/10.33021/ijfbp.v7i1.3669

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