FACTORS AFFECTING DIVIDEND PAYMENT POLICY

Agung Bana

doi:10.47312/ambr.v5i01.296

Abstract

Dividend payments are a routine activity that is usually done by the company once a year. Before dividend payments are made many factors are considered before the company pays the dividends. This study aims to determine what factors affect the payment of dividends. The sample used in this study is all non-financial sector companies that pay dividends for 3 consecutive years 2016 to 2018. This study uses the Eviews test tool and uses multiple regression tests. The results of this study indicate that profitability, life cycle and company size have positive effects while liquidity, cash flow, growth opportunities and leverage have no effect on dividend payout policies.

Highlights

Companies in carrying out their operations would want to generate maximum profits
The results show that profitability, life cycle and company size have a positive effect while cash flow has a negative effect on dividend payments
Based on the results of research and discussion of the factors that influence dividend payments, it can be concluded that profitability has a positive effect on dividend payments

Summary

Introduction

Companies in carrying out their operations would want to generate maximum profits. So when a company makes a profit the shareholders will feel the impact in the form of a part of net income which is commonly called a dividend. There are several factors that affect dividend payments such as corporate tax, liquidity, profitability, company size, cash flow and other regulations. Research on dividend payments has been conducted abroad by (Arko, Abor, Adjasi, & Amidu, 2014) the results show that tangibility, company size and profitability have a positive effect on dividend payments. Khan & Shamim (2017) the results of his research profitability has a positive effect while cash flow has a negative effect on dividend payments. Proportional to (Brahmiah, Srinivasan, & Sangeetha, 2018) which states profitability, liquidity and company size have a negative effect on dividend payments. Jabbouri (2016) mentions company size and liquidity have a positive effect while cash flow and growth have a negative effect Proportional to (Brahmiah, Srinivasan, & Sangeetha, 2018) which states profitability, liquidity and company size have a negative effect on dividend payments. Jabbouri (2016) mentions company size and liquidity have a positive effect while cash flow and growth have a negative effect

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Discussion

Conclusion