Research Paper
Year: 2022 | Month: August | Volume: 9 | Issue: 8 | Pages: 238-257
DOI: https://doi.org/10.52403/ijrr.20220822
The Effect of Investment and Funding Policies on Firm Value with Dividend Policy as a Moderating Variable in Banking Companies That are Members of the LQ-45 Index
Hanapi1, Khaira Amalia Fachrudin1, Amlys Syahputra Silalahi1
1Master of Management Science Study Program Faculty of Economics and Business Universitas Sumatera Utara
Corresponding Author: Hanapi
ABSTRACT
The value of a banking firm reflects the number of prices that investors are willing to pay if the company were to be sold. The responsibility of financial management as an agent is to raise the prosperity of the principle, i.e., the company's owner or shareholder, via a number of financial management-related actions or policies. This study's concern is the fluctuating movement of firm value caused by the management policies of the corporation. This study aims to determine the effect of investment and funding policies on firm value, with dividend policy as a moderating variable in banking companies incorporated into the LQ-45 Index. The determination of the sample was made using the purposive sampling method in order to obtain four banking companies from seven companies that joined the LQ-45 Index. The data is processed using PLS software. The results of the study indicate that investment policy has a positive and significant effect on firm value, which is included in the LQ-45 Index on the Indonesia Stock Exchange. The funding policy has a positive and significant effect on the firm value, which is included in the LQ-45 Index on the Indonesia Stock Exchange. The dividend policy can moderate the effect of the investment policy on firm value as included in the LQ-45 Index on the Indonesia Stock Exchange. The dividend policy cannot moderate the effect of the funding policy on firm value as included in the LQ-45 Index on the Indonesia Stock Exchange.
Keywords: Investment Policy, Funding Policy, Firm Value, Dividend Policy.
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