Determinants of Fundamental Factors on Dividend Policy on the LQ45 Sharia Stock Index in Indonesia

Abstract

This study aims to empirically examine the factors that are considered to influence dividend policy on the LQ 45 Sharia Stock Index in Indonesia. Dividend policy is closely related to determining the profit that will be distributed among shareholders and reinvestment as retained earnings. The independent variables in this study include Current Ratio (CR), Return on Equity (ROE), Debt to Equity Ratio (DER), and Earning Per Share (EPS). While the dependent variable is the Dividend Payout Ratio (DPR). The type of research is quantitative research that uses secondary data. The sampling method used was purposive sampling. It was found that 13 companies distributed dividends consecutively during the study period, namely 2016–2022. The data analysis technique used is multiple regression analysis with panel data as the method of analysis. Liquidity (CR) and Profitability (ROE) have no significant effect on the Dividend Payout Ratio (DPR). While Leverage (DER) and Earning per Share (EPS) have a significant influence on the Dividend Payout Ratio (DPR). Keywords: dividend payout ratio, current ratio, return on equity, debt to equity ratio, earning per share