<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The main aim of this research is to test the effect of financial policy on firm value. The research question developed in this research is how the effect of financial policy on firm value by using the concept of ABID? Based on the purpose sampling method there are 26 companies which distribute the dividends successively, so that 26 samples are obtained. Structural equation model with partial least square analysis tool is used to prove empirically the effect of each variables and the hypothesis testing. The findings of the study show that investment decisions have negative effect on dividend policy, but not significant. Investment decisions have significant positive effects on funding decisions and firm value. Dividend policy has significant positive effect on funding decisions and firm value. Funding decisions significantly influence the firm value positively. The results of this study reject the pecking order theory.</p></abstract>

The main aim of this research is to test the effect of financial policy on firm value. The research question developed in this research is how the effect of financial policy on firm value by using the concept of ABID? Based on the purpose sampling method there are 26 companies which distribute the dividends successively, so that 26 samples are obtained. Structural equation model with partial least square analysis tool is used to prove empirically the effect of each variables and the hypothesis testing. The findings of the study show that investment decisions have negative effect on dividend policy, but not significant. Investment decisions have significant positive effects on funding decisions and firm value. Dividend policy has significant positive effect on funding decisions and firm value. Funding decisions significantly influence the firm value positively. The results of this study reject the pecking order theory.

ABID concept in the effect of financial policy on firm value

HOLISTICA – Journal of Business and Public Administration

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"ABID concept in the effect of financial policy on firm value"}

The main aim of this research is to test the effect of financial policy on firm value. The research question developed in this research is how the effect of...

ABID concept in the effect of financial policy on firm value

Published Online: Aug 21, 2019

Page range: 51 - 68

DOI: https://doi.org/10.2478/hjbpa-2019-0015

Keywords
financial policy, firm value, Tobin’s Q

© 2019 Tri Purwani, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

ABID concept in the effect of financial policy on firm value

Published Online: Aug 21, 2019

Page range: 51 - 68

DOI: https://doi.org/10.2478/hjbpa-2019-0015

Keywordsfinancial policy, firm value, Tobin’s Q

© 2019 Tri Purwani, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
financial policy, firm value, Tobin’s Q