Testing Theory of Dividend Policy: Evidence in the Real Estate Sector in Indonesia

Abstract

— The aim of this research is to test the irrelevant theory and relevant theories of the dividend policy. This research is conducted on real estate sector from period 2012-2015 to get 168 observation data. Variable of research include independent variable that is financial performance of company which proxy by Profitability, Dependent variable that is Dividend Policy which proxy by Dividend Payout Ratio, and Moderation variable that is firm size proxy by total assets. Test results obtained when the profit increase is not followed by an increase in dividend payment, so it can be concluded company hold the principle that company value is not determined by how the company disributes its earnings as dividends. So that in this study found in Indonesia especially real estate sector companies used dividend irrelevant theory.