The Effect Of Profitability, Dividend Policy And Debt Policy On Firm Value

Abstract

The firm value is the market value that can maximize shareholders' prosperity when the company's stock price increases. The firm value can be measured using the market value reflected in the stock price. The firm value is crucial as it reflects the company's performance, which can influence investors' perception of the company. This research aims to examine the impact of profitability, dividend policy, and debt policy on firm value. The population in this study consists of all companies listed in the LQ45 Index on the Indonesia Stock Exchange from 2016 to 2020. The research sample consists of 16 companies determined using purposive sampling method. The statistical tool SPSS version 24 is used to perform classical assumption tests, multiple linear regression analysis, and hypothesis testing. The research findings indicate that profitability and dividend policy have a significant positive effect on firm value, while debt policy does not have a significant effect on firm value when examined individually.