Dividend policy in moderating the impact of capital structure and profitability on firm value

Purpose: Analyzing the effect of capital structure and profitability on firm value, with dividend policy as a moderator and firm size as a control variable on LQ45 index companies 2020-2024. Methodology/approach: The quantitative approach used the Moderated Regression Analysis (MRA) method with a sample of LQ45 index companies 2020-2024 selected through purposive sampling, resulting in 70 observational data sets. The analysis used SPSS 27. Findings: Capital structure has a positive and significant effect on firm value, while profitability has no effect. Dividend policy negatively moderates the relationship between capital structure and firm value. However, dividend policy does not moderate the relationship between profitability and firm value. Other findings indicate that firm size has a significant negative effect on firm value. Practical and Theoretical contribution/Originality: This study enriches empirical evidence on the relevance of Trade Off Theory and Signaling Theory in explaining the dynamics of firm value in post pandemic economic conditions. It also provides input for management in formulating optimal funding and dividend policies to increase firm value. Research Limitation: Limited to LQ45 index companies with a five year observation period 2020-2024, so generalization is still limited.