Assets Growth, Earnings Persistence, Investment Opportunity Setand Earnings Management on Dividend Policy and Firm Value (Study at Bank Companies in Indonesia)

Indrayati Indrayati,Slamet Slamet,Basuki Rachmat

doi:10.35741/issn.0258-2724.56.2.18

Abstract

The purpose of this study was to test the effect empirically the influence of growth and earnings management on dividend payment policies and company value in as many as 40 banking companies listed on the Indonesian stock exchange in 2015-2019. The research method is explanatory research with secondary data, based on documentation data, data processing using the Structural Equation Model test. The results showed that asset growth had a negative and insignificant effect on dividends, persistence had no significant negative effect on dividends, investment opportunity set had a significant positive effect on dividends, earning management had a positive and insignificant effect on dividends, asset growth had no significant negative effect on the value company, dividends had a significant positive effect on firm value. Persistence has no significant positive effect on firm value. Investment opportunity set has a positive and insignificant effect on firm value, and earning management had a significant positive effect on firm value.

Highlights

Financial reports are a medium of liaison between management and company owners or shareholders
The results showed that asset growth had a negative and insignificant effect on dividends, persistence had no significant negative effect on dividends, investment opportunity set had a significant positive effect on dividends, earning management had a positive and insignificant effect on dividends, asset growth had no significant negative effect on the value company, dividends had a significant positive effect on firm value
The test results for the minimum, maximum, skew, critical ratio, kurtosis to determine the normality of the data are as follows: Table 1

Summary

Introduction

Financial reports are a medium of liaison between management and company owners or shareholders. The financial statements contain information about the development and condition of the company in a certain period. Companies must prepare financial reports based on generally accepted accounting principles (GAAP) to obtain quality financial reports. Based on financial reports prepared based on GAAP, it provides flexibility for managers to choose the accounting method to be applied, which is one of the implementations of accrualbased earnings management in recording financial transactions. Accrual accounting generally provides a better indication of a company's ability to generate profitable cash flow, both and in the future. Recording transactions based on accruals can allow managers to modify financial statements to produce the desired profit

Objectives

Results

Discussion

Conclusion