Determining Factors of Dividend Premium For Manufacturing Company on IDX

DOI

10.2991/aebmr.k.220501.017How to use a DOI?

Keywords

Catering Theory of Dividend; Dividend Premium; Liquidity; Profitability; Company Growth

Abstract

One of important factors in determining the dividend distribution is how to measure dividend premium. Coming from Baker and Wurgler (1) & (2), it has been declared the catering theory dividend which states new perspectives for management which should take more attention regarding the demand of investors about dividend. The investor’s demand is not only about the monetary number of dividend but also the dividend level will meet their demand. In order to fulfill that investor needs, the management must set the dividend premium. Thus, the purpose of this study was to examine the effect of liquidity, profitability, and company growth on the dividend premium in manufacturing companies listed on the IDX. By using panel data regression from time period from 2015-2018, we find the profitability, leverage, and retention ratio have a positive significant effect on dividend premium while liquidity and company growth (PEG) have no significant effect on dividend premium. Hence from our result, we can make an implication of the quiet validity from catering theory of dividend in IDX and the firm should set properly profitability, leverage and retention ratio in order to get positive dividend premium which will bring good response from investors in the capital market.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

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TY  - CONF
AU  - Levilia Diana
AU  - Ignatius Roni Setyawan
PY  - 2022
DA  - 2022/05/11
TI  - Determining Factors of Dividend Premium For Manufacturing Company on IDX
BT  - Proceedings of the tenth International Conference on Entrepreneurship and Business Management 2021 (ICEBM 2021)
PB  - Atlantis Press
SP  - 103
EP  - 108
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220501.017
DO  - 10.2991/aebmr.k.220501.017
ID  - Diana2022
ER  -