The Effect of Dividend Policy on Share Price Manufacturing Companies in Indonesia

Abstract

The objective of the empirical study is to examine and analyze the impact of dividend policy on the share prices. The sample object used in this research are manufacturing companies listed on Indonesia Stock Exchange in the period 2014-2018. The independent variables are dividend per share, retention ratio, return on equity, dividend yield and earnings per share. The dependent variable is share prices of manufacture sector. The number of the samples in this research are 36 companies by using purposive sampling technique. Based on the results of panel data regression model indicates that dividend per share has a positive impact on share prices. Dividend yield has negative impact on share prices. Retention ratio, return on equity and earnings per share has insignificant impact on share prices. The results of this study are expected to be the reference for companies and investors to increase share prices. Keywords: dividend per share, dividend yield, earnings per share, retention ratio, return on equity, share prices I.