Analysis of the Influence of Dividend Policy on Changes in Stock Prices in Manufacturing Companies Listed on the IDX

Research Objectives: The primary objective of this study is to analyze the impact of dividend policy on share prices in manufacturing companies listed on the Indonesia Stock Exchange. Specifically, the research aims to: Examine how different dividend policies affect investor perceptions and their subsequent influence on share price movements. Identify the key factors within dividend policies that contribute to fluctuations in share prices. Explore the implications of dividend policy decisions on long-term investor confidence and market behavior. Revised Statement: Dividend policy is a strategic decision made by a company regarding how to utilize its profits—whether to distribute them as dividends to shareholders or retain them for further investment in the business. This research focuses on analyzing the impact of dividend policy on share prices in manufacturing companies listed on the Indonesia Stock Exchange. The study employs a qualitative approach, gathering information through a comprehensive literature review. The data collected undergoes several stages of analysis, including data simplification, visualization, and the formulation of conclusions. The findings indicate that dividend policy significantly affects share prices. Dividend policy shapes investor perceptions of the company, which in turn influences share price movements. For instance, consistent dividend payments can bolster investor confidence and send a positive signal about the company’s performance, potentially driving buying activity in the market. Conversely, a reduction in dividend payments might raise investor concerns, possibly leading to a decline in share prices. Research Implications: The implications of this study are twofold. First, for corporate decision-makers, the research underscores the importance of carefully considering dividend policies as they directly influence investor confidence and share price stability. Second, for investors, the findings provide insights into how dividend policies can serve as indicators of a company’s financial health and future performance, guiding their investment decisions.