Profitability, Debt Policy, and Firm Value: Dividend Policy as Mediating Variable in Consumer Non-Cyclicals Sector

Abstract

This research investigates dividend policy's mediating role in the relationship between profitability and firm value within Indonesia's consumer non-cyclicals sector. Utilizing panel data from 21 companies listed on the Indonesia Stock Exchange during 2019-2023, the study employs WarpPLS version 8.0 for Structural Equation Modeling analysis. Findings demonstrate that profitability significantly enhances firm value, debt policy positively influences firm valuation, and dividend policy serves as an effective mediator between profitability and firm value. The results underscore the strategic importance of dividend distribution decisions in translating operational performance into shareholder value creation, particularly within stable-demand consumer goods companies.