Dividend payment ratio does not have a significant influence on stock prices

Oct 13, 2025 by talynt.org 144 views

The Influence of Dividend, Leverage, and Liquidity Policies on Stock Prices with Stock Beta as Moderating Variables in Manufacturing Companies Listed on the Indonesia Stock Exchange

Introduction

The Indonesia Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a vast array of companies listed on it. Among these companies, manufacturing companies play a significant role in the country's economy. The performance of these companies is often measured by their stock prices, which are influenced by various factors, including dividend, leverage, and liquidity policies. This study aims to reveal the effect of these policies on stock prices in manufacturing companies listed on the IDX during the 2012-2014 period, with stock beta as a moderating variable.

Background

Dividend payment ratio, leverage, and liquidity are three critical factors that can influence stock prices. Dividend payment ratio shows the proportion of net profit shared as dividends to shareholders, while leverage, measured by the ratio of debt to equity, indicates the proportion of company funding originating from debt compared to equity. Liquidity, measured by the current ratio, shows the company's ability to fulfill its short-term obligations with its current assets. Stock beta, on the other hand, is a measure of the stock's volatility relative to the overall market.

Methodology

This study uses secondary data from the annual financial statements of 19 manufacturing companies listed on the IDX and meet the sampling criteria of a total of 135 companies. The data analysis method used is multiple linear regression, by first testing the classic assumptions. The independent variables used in this study are dividend payment ratio, leverage, and liquidity, while stock price is the dependent variable. Stock beta acts as a moderating variable.

Results

The results of this study showed that:

Dividend payment ratio does not have a significant influence on stock prices. This may be caused by several factors, such as lack of transparency in the distribution of dividends, or investor preferences on investment in companies with high growth that do not necessarily distribute dividends.
Leverage has a significant negative influence on stock prices. The higher the leverage, the greater the risk for the company and investors. This can cause a decrease in stock prices because investors are more interested in companies with a healthier financial structure.
Liquidity does not have a significant influence on stock prices. Although liquidity is important, it turns out that in this study period, liquidity is not a dominant factor that affects stock prices.
Stock beta is able to moderate the relationship between debt and equity ratios with stock prices. This means, the effect of leverage on stock prices will be greater on high beta stocks (high risk), compared to stocks with low beta (low risk).
Stock beta is unable to moderate the relationship between dividend payment ratios and current ratios with stock prices.

Implications

This research has some important implications for company investors and management. Investors can take advantage of the results of this study to choose shares by considering leverage and beta stocks. Manufacturing companies can try to increase liquidity and pay attention to their financial structure to attract investors and increase stock prices.

Limitations

This study has several limitations, such as limited research period and relatively small company samples. Further research with a larger period of time and sample can be done to confirm the results of this study and increase understanding of the effect of the variables studied on stock prices.

Conclusion

In conclusion, this study reveals the effect of dividend, leverage, and liquidity policies on stock prices in manufacturing companies listed on the IDX during the 2012-2014 period, with stock beta as a moderating variable. The results of this study have important implications for company investors and management, and highlight the need for further research in this area.

Recommendations

Based on the results of this study, the following recommendations can be made:

Investors should consider leverage and beta stocks when choosing shares.
Manufacturing companies should try to increase liquidity and pay attention to their financial structure to attract investors and increase stock prices.
Further research with a larger period of time and sample can be done to confirm the results of this study and increase understanding of the effect of the variables studied on stock prices.

Future Research Directions

Future research can build on the findings of this study by:

Examining the effect of dividend, leverage, and liquidity policies on stock prices in other industries or countries.
Investigating the impact of other factors, such as corporate governance and executive compensation, on stock prices.
Developing a more comprehensive model that incorporates multiple variables and their interactions.

By exploring these research directions, we can gain a deeper understanding of the complex relationships between dividend, leverage, liquidity, and stock prices, and provide valuable insights for investors, management, and policymakers.
Frequently Asked Questions (FAQs) about the Influence of Dividend, Leverage, and Liquidity Policies on Stock Prices

Q: What is the main objective of this study?

A: The main objective of this study is to reveal the effect of dividend, leverage, and liquidity policies on stock prices in manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the 2012-2014 period, with stock beta as a moderating variable.

Q: What are the independent variables used in this study?

A: The independent variables used in this study are:

Dividend payment ratio: shows the proportion of net profit shared as dividends to shareholders.
Leverage: measured by the ratio of debt to equity, indicates the proportion of company funding originating from debt compared to equity.
Liquidity: measured by the current ratio, shows the company's ability to fulfill its short-term obligations with its current assets.

Q: What is the moderating variable used in this study?

A: The moderating variable used in this study is stock beta, which is a measure of the stock's volatility relative to the overall market.

Q: What are the results of this study?

A: The results of this study showed that:

Dividend payment ratio does not have a significant influence on stock prices.
Leverage has a significant negative influence on stock prices.
Liquidity does not have a significant influence on stock prices.
Stock beta is able to moderate the relationship between debt and equity ratios with stock prices.
Stock beta is unable to moderate the relationship between dividend payment ratios and current ratios with stock prices.

Q: What are the implications of this study?

A: The implications of this study are that investors should consider leverage and beta stocks when choosing shares, and manufacturing companies should try to increase liquidity and pay attention to their financial structure to attract investors and increase stock prices.

Q: What are the limitations of this study?

A: The limitations of this study are:

Limited research period (2012-2014).
Relatively small company samples (19 manufacturing companies).
Further research with a larger period of time and sample can be done to confirm the results of this study and increase understanding of the effect of the variables studied on stock prices.

Q: What are the recommendations of this study?

A: The recommendations of this study are:

Investors should consider leverage and beta stocks when choosing shares.
Manufacturing companies should try to increase liquidity and pay attention to their financial structure to attract investors and increase stock prices.
Further research with a larger period of time and sample can be done to confirm the results of this study and increase understanding of the effect of the variables studied on stock prices.

Q: What are the future research directions of this study?

A: The future research directions of this study are:

Examining the effect of dividend, leverage, and liquidity policies on stock prices in other industries or countries.
Investigating the impact of other factors, such as corporate governance and executive compensation, on stock prices.
Developing a more comprehensive model that incorporates multiple variables and their interactions.

Q: What are the benefits of this study?

A: The benefits of this study are:

Providing insights into the relationship between dividend, leverage, liquidity, and stock prices.
Helping investors make informed decisions when choosing shares.
Providing recommendations for manufacturing companies to improve their financial structure and attract investors.

Q: What are the potential applications of this study?

A: The potential applications of this study are:

Helping investors and analysts make informed decisions when evaluating companies.
Providing insights for companies to improve their financial structure and attract investors.
Informing policy decisions related to corporate governance and financial regulation.