The Determinants of Dividend Policy and Their Implications for Stock Prices on Manufacturing Companies Listed on the Indonesia Stock Exchange

This study aims to analyze (1) the determinants of dividend policy and (2) the implications for stock prices. This is a quantitative research conducted using panel data regression method. The population is all the financial statements of manufacturing companies listed on the Indonesia stock exchange. Samples were obtained through purposive sampling method, namely, manufacturing companies that distributed dividends according to the criteria in 2013–2015, as many as 19 companies. The findings of this study are: (1) firm size and profitability (ROA) affect the company’s dividend policy negatively and significantly. While leverage (DER) does not significantly affect the dividend policy; (2) variable firm size, profitability (ROA), and leverage (DER) significantly affect the company’s stock price. Simultaneously, variable firm size, profitability, and leverage have a significant effect on the dividend policy and also on the stock price of manufacturing companies listed on the IDX for the period 2013–2015. Managerial implications for companies in determining dividend policy and increasing stock prices must consider the variables of firm size, profitability, and leverage.     Keywords: dividend policy, stock price, firm size, profitability, leverag