The mediating role of dividend policy in the influence of investment decisions on stock prices
Keywords:
Investment Decision, Dividend Policy, Stock Price, Stock Market, LQ45Abstract
This study investigated the mediating role of dividend policy in the relationship between investment decisions and stock prices among companies listed on the LQ45 Index in Indonesia from 2017 to 2022. Utilizing a sample of 40 companies that remained stable in the index for at least three consecutive years, we conducted regression analyses after ensuring the validity of the data through normality, multicollinearity, and heteroscedasticity tests. The results indicated that investment decisions did not have a significant direct effect on stock prices or dividend policy. However, dividend policy had a significant negative effect on stock prices and mediated the relationship between investment decisions and stock prices. This suggests that while investment decisions alone may not directly influence stock prices, their impact becomes significant when channeled through dividend policy. The findings highlight the importance for companies to strategically manage their dividend policies alongside investment decisions to enhance shareholder value and positively influence stock prices.
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