Dividend Policy in Indonesia Agriculture Firms: Modmed Profitability and Liquidity

Abstract

Against the backdrop of the existence of a dividend policy that can provide investors with a variety of signals, the objective of this study is to determine the dividend policy in the Indonesian agricultural sector, given the sector's pronounced volatility between 2014 and 2021. This is what causes the agricultural sector to experience the greatest volatility compared to other sectors. This research develops a dividend policy model with moderating variables, namely liquidity, and mediating variables, namely profitability, in response to a number of gaps in the existing literature. The method employed is quantitative explanation with purposive sampling technique. This study employs path analysis by means of the SEM method and STATA version 14. The results indicate that leverage and firm size have a negative impact on dividends, while profitability has no bearing on dividend policy. Other results indicate that leverage has no effect on profitability, while firm size has a negative effect. The failure of the moderation and mediation tests is caused by the absence of profitability's effect on dividends.