THE INFLUENCE OF FIRM’S FINANCIAL PERFORMANCE ON STOCK PRICE THROUGH DIVIDEND POLICY: A CASE ON SELECTED IDX LQ45

Abstract

This research aims at analyzing the influence of firm’s specific financial ratio consist of price book value, price earning ratio, debt to equity ratio, and return on asset toward stock price with dividend policy as mediating variable. This empirical research was conducted focus on the company listed in IDX which characterized as LQ45 index during the period of 2010–2017 to get 64 samples. The panel data has proceeded through the classical assumption test, multiple regression, and path analysis approached by employing Eviews 9.0. The result carried by the multiple regression found that PER and DER have a positive significant influence, as well as PBV and ROE has positive insignificant influence toward DPR. In addition, path analysis test indicates that DPR only can mediate the influence of PER and DER toward stock price.