The Role of Profitability on Dividend Policy in Property and Real Estate Registered Subsector Company in Indonesia

Abstract

Nowadays, the company's dividend payout policy is the subject of much analysis and debate among financial practitioners. In the business phenomenon that occurs, there are several factors influence the company in carrying out its dividend policy, including financial performance. The company's financial performance reflected in financial ratios, such as leverage and firm size. The purpose of this study was to determine the role of profitability on dividend policy in listed property and real estate sub-sector companies in Indonesia for the period 2012 - 2019. Furthermore, the focus of this study is to examine profitability in mediating the effect of leverage and firm size on company dividend policy. The research method in this study uses a quantitative approach. The data were processed and analyzed statistically using Eviews v.10 software. The main results in this study reveal that profitability mediates the effect of leverage and firm size on dividend policy positively and significantly. Contribution of the results of this study to company management as input for developing dividend policies to safeguard shareholders' wealth by considering the company's profits and the benefits of investing for shareholders.