The Influence of Dividend Policy, Financing Decisions, and Free Cash Flow on Firm Value in Indonesia

Data from the Indonesian Central Securities Depository (KSEI) shows that the number of Single Investor Identification (SID) holders in 2023 has reached more than 11 million, a rapid increase from around 2 million in 2018. This growth reflects an increase in public awareness of the importance of investing in the capital market. In addition, the Indonesian capital market plays an important role in strengthening the resilience of the national economy by providing funds for companies in various sectors (World Bank, 2022; KSEI, 2023). Thus, research on the factors that influence capital market dynamics is becoming increasingly relevant, especially in the context of strategic sectors that contribute significantly to the national Gross Domestic Product (GDP). This study aims to analyze the effect of dividend policy, financing decisions, and free cash flow on Firm value in Indonesia. The research population consists of primary consumption sector companies listed on the Indonesia Stock Exchange (IDX) during the period 2021–2024. The sample was selected using purposive sampling and analyzed using multiple linear regression with classical assumption tests. The results show that dividend policy and financing decisions have a positive and significant effect on Firm value, while free cash flow has a negative but insignificant effect. These findings indicate that optimal dividend distribution policy and a balanced financing structure can increase Firm value, while inefficient free cash flow management can lower investor perception of company performance.