The Effect of Economic Value Added and Earning Per Share on Devidend Policy: Evidence from LQ-45 Company in Indonesia
Abstract
This research purpose is to analyze the effect of Economic Value Added (EVA) and Earning Per Share (EPS) on Devidend Policy in Indonesia. The populations are LQ-45 Company which listed to Indonesia Stock Exchange (Bursa Efek Indonesia/BEI). Base on the 45 companies listed in the LQ-45 Index, the authors set the criteria needed for data collection related to research variables, including companies consistently distributing dividends during the study period, companies engaged in non-financial fields and had positive profits during the year of observation. On the basis of these criteria, there are only 32 companies that can be further processed. The data was collected using documentation techniques and linear regression models were used to analyze. This study uses EVA and EPS as a ratio to measure what policies which the company will take regarding its profits. EVA is considered the right measurement to use because it focuses on the cost of capital incurred by the company, where the higher value of EVA shows that the company has remaining profits after being used to finance its capital, while EPS concerns the earnings per share that will be received by shareholders for the capital invested. This study findings indicate that simultaneously the Economic Value Added and Earning Per Share variables together have a significant impact on Dividend Policy, whereas partially only Earning Per Share has a significant effect on Dividend Policy.
Keywords: Economic Value Added (EVA), Earning Per Share (EPS), Devidend Policy
References
Agus, S. (2010). Manajemen Keuangan Teori dan Aplikasi. Edisi Keempat. Yogyakarta: BPFE.
Akerlof, G. A. (1978). The Market for “Lemonsâ€: Quality Uncertainty and The Market Mechanism. In Uncertainty in Economics (pp. 235-251). Academic Press.
Anggraeni, I. (2018). Analisis Pengaruh Economic Value Added, Earnings Per Share, dan Dividend Payout Ratio Terhadap Return Saham Pada Perusahaan Keluarga (Doctoral Dissertation, Universitas Islam Indonesia).
Arizona, I. P. E. (2016). Moderasi Economic Value Added Atas Pengaruh Kebijakan Deviden Terhadap Nilai Perusahaan. Jurnal Riset Akuntansi (JUARA), 6(1).
Brigham and Houston. (2014). Dasar-Dasar Manajemen Keuangan. Jakarta: Erlangga.
Costin, D. M. (2017). Economic Value Added–A General Review of the Concept.“Ovidius†University Annals, Economic Sciences Series, 17(1), 168-173.
Darmadji, T. Fachrudin.(2012). Pasar Modal di Indonesia. Salemba Empat, 14.
Dictionary, B. L. (1990). Blacks Law Dictionary. URL: https://dictionary. thelaw. com/truth [January 13th, 2021].
Hakim, L., Sunardi, N. (2017). Determinant of leverage and it's implication on company value of real estate and property sector listing in IDX period of 2011-2015. Man in India, 97(24), pp. 131-148.
Haque, R., Siddikee, J. A., Hossain, S., Chowdhury, S. P., & Rahman, M. (2013). Relationship between Dividend Payout and Economic Value Added: A case of square pharmaceuticals limited, Bangladesh. International Journal of Innovation and Applied Studies, 3(1), 98-104.
Husain, T., & Sunardi, N. (2020). Firm's Value Prediction Based on Profitability Ratios and Dividend Policy. Finance & Economics Review, 2(2), 13-26.
Jogiyanto, H. M. (2010). Teori Portofolio dan Analisis Investasi. Edisi Ketujuh. BPFE. Yogyakarta.
Kadim, A., Sunardi, N & Husain, T. (2020). The modeling firm's value based on financial ratios, intellectual capital and dividend policy.Accounting, 6(5), 859-870.
Kasmir. (2012). Analisis Laporan Keuangan. Jakarta: Raja Grafindo Persada
Lintner, J. (1956). Distribution of Incomes of Corporations among Dividends, Retained Earnings, and Taxes. The American Economic Review, 46(2), 97-113
Manusia Untuk Mahasiswa.
Mawardi, S., Arsid, A., & Wahyudi, W. (2021). ANALISIS PERASAAN SENANG (KEPUASAN) TERHADAP HASIL KERJA YANG DIUKUR MELALUI KOMUNIKASI, EFIKASI DAN PENGHARGAAN DIRI. SCIENTIFIC JOURNAL OF REFLECTION: Economic, Accounting, Management and Business, 4(4), 850-858.
Nardi Sunardi Et Al (2020). Determinants of Debt Policy and Company’s Performance, International Journal of Economics and Business Administration Volume VIII Issue 4, 204-213
O'Hanlon, J., & Peasnell, K. (1998). Wall Street's Contribution to Management Accounting: The Stern Stewart EVA® Financial Management System. Management Accounting Research, 9(4), 421-444.
Spence, M. (1978). Job Market Signaling. In Uncertainty in Economics (pp. 281-306). Academic Press.
Sulistyowati, I. (2010). Pengaruh Profitabilitas, Leverage dan Growth Terhadap Kebijakan Dividen dengan Good Corporate sebagai Variabel Intervening. Simposium Nasional Akuntansi (SNA) XIII. Purwokerto.
Tandelilin, E. (2010). Portofolio dan Investasi: Teori dan Aplikasi. Kanisius.
Wahyu, W., & Salam, R. (2020). KOMITMEN ORGANISASI (Kajian: Manajemen Sumber Daya Manusia).
Downloads
Published
Issue
Section
License
Open Access
HUMANIS (Humanities, Management and Science Proceedings) is a national peer reviewed and open access journal that publishes significant and important research from all area of agroindustry.
This journal provides immediate open access to its content that making research publish in this journal freely available to the public that supports a greater exchange of knowledge.
Copyright
Submission of a manuscript implies that the submitted work has not been published before (except as part of a thesis or report, or abstract); that it is not under consideration for publication elsewhere; that its publication has been approved by all co-authors. If and when the manuscript is accepted for publication, the author(s) still hold the copyright and retain publishing rights without restrictions. Authors or others are allowed to multiply article as long as not for commercial purposes. For the new invention, authors are suggested to manage its patent before published. The license type is CC-BY-SA 4.0.
Disclaimer
No responsibility is assumed by publisher and co-publishers, nor by the editors for any injury and/or damage to persons or property as a result of any actual or alleged libelous statements, infringement of intellectual property or privacy rights, or products liability, whether resulting from negligence or otherwise, or from any use or operation of any ideas, instructions, procedures, products or methods contained in the material therein.
