Influence of managerial ownership, debt policy, profitability, firm size, and free cash flow on dividend policy: A study in Indonesian manufacturing industries

The aim of this study is to analyze how the managerial ownership, debt policy, profitability, firm size, and free cash flow impact the dividend policy on manufacturing industries, and to determine the dominant factors that affect dividend policy.

Purposive sampling method was used in taking samples of the eight companies listed on the Indonesian stock exchange.

After using multiple linear regression, this research found that only the free cash flow hasa significant and positive impact on dividend policy. Managerial ownership has a significant negative effect on dividend policy. Debt policy and firm size did not have a significant negative effect on dividend policy. Profitability did not have a significant positive effect on dividend policy. Dominant factor that affected dividend policy is the company's free cash flow.

The limitation of the finding of this study was the use of only five variables that affect the company's dividend policy while there are many other variables that affect dividend policy.

The result of this study would help manufacturing industries to betterunderstand the factors that affected dividend policy.

The study offers a beneficial source of information to manufacturing industries because it is one of the dominant sector of capital market at Indonesia Stock Exchange, or IDX.