FREE CASH FLOW DAN PROFITABILITY TERHADAP FIRM VALUE MELALUI DIVIDEND POLICY PADA PERUSAHAAN MANUFAKTUR TERDAFTAR DI BURSA EFEK INDONESIA.

Abstract

Firm value playsimportant role in maximizing shareholder profits at a time of rising share prices. Rising
company share price will improve shareholders' welfare. Firm value is important to investors because
it is an indicator of the market in measuring the company as a whole. The purpose of the research is to
analyze the influence of free cash flow and profitability on firm value by mediated by dividend policy. This research is based on several theories including Agency Theory, Signaling Theory, Agency Cost
Theory, Firm Value, Profitability, Free Cash Flow, and Dividend Policy. The object of research s a
manufacturing company listed on the Indonesia Stock Exchange in the period 2015-2017 with 60
companies as the sample. Analysis techniques used by Structural Equation Modelling (SEM). The
results of the research include (1), there is a positive and significant influence of free cash flow on firm
value (2) there is a positive and significant influence of profitability on firm value, (3) there is a positifve
and significant influence of free cash flow on dividend policy, (4) there is no influence of profitability
on dividend policy, (5) there is a positive and significant influence of dividend policy on firm value, (6)
dividend policy can’t mediate the effect of profitability on firm value, and (7) dividend policy can
mediate the influence of free cash flow on firm value.
Keywords : Profitability, Free Cash Flow, Dividend Policy, dan Firm Value