Title:
DETERMINANT ANALYSIS OF DIVIDEND POLICY: Empirical Study on Islamic Capital Market in Indonesia

Authors:
Sutrisno and Bagus Panuntun, Indonesia

Abstract:

Dividends are a very important issue in the financial management function because dividend policies are considered by investors as a signal of company performance. Companies that distribute dividends are considered to have good market performance. The purpose of this study is to examine the determinants of dividend policy. The determinants of the tested dividend policy are profitability measured by return on assets (ROA) and return on equity (ROE), liquidity measured by current ratio (CR), leverage measured by debt to equity ratio (DER), and firm size is calculated using the natural logarithm of total assets. Whereas dividend policy is measured by the dividend payout ratio (DPR). The population in this study are companies registered in the Islamic capital market with a sample of 100 companies taken by purposive sampling method. To test the hypothesis using multiple regression analysis tools with a significance level of 0.05. The results showed that profitability measured by ROE and liquidity had a significant and positive effect on dividend policy, while profitability as measured by ROA, leverage and firm size did not affect dividend policy