Profitability as Mediator of Dividend and Size on Debt Policy (IDX, 2019-2023)

Abstract

This research explores the mediating role of profitability in the relationship between dividend policy, firm size, and debt policy among companies listed on the Indonesia Stock Exchange in 2019–2023. Using purposive sampling methodology, 15 companies were selected and analyzed with WarpPLS 8.0 software for PLS-SEM analysis. The findings reveal that dividend policy negatively affects debt policy, firm size positively affects debt policy, and profitability mediates the relationship between dividend policy and debt policy. These results support both the pecking order and trade-off theories in explaining corporate debt decisions in the Indonesian financial sector.