The Effect Of Investment Opportunities In Moderating Dividend Policy Relations, Funding Decisions, Free Cash Flow, And Company Size On The Value Of The Shareholders Of The Consumer Non-Cyclicals Sector In The Indonesian Stock Exchange 2020-2022
The Effect of Investment Opportunities on Shareholders in the Consumer Non-Cyclicals Sector
Introduction
The Indonesian Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a wide range of companies listed across various sectors. The Consumer Non-Cyclicals sector is a significant part of the IDX, comprising companies that provide essential goods and services to consumers. As a result, the performance of these companies has a direct impact on the value of their shareholders. This study aims to analyze the effect of investment opportunities in moderating the relationship between dividend policies, funding decisions, free cash flow, and company size on the value of company shareholders in the non-cyclicals consumer sector listed on the Indonesia Stock Exchange between 2020 to 2022.
Methodology
This study used a Purposive sampling method to select 42 companies that meet the selected criteria, with a total of 126 observations. The data were analyzed using descriptive statistical analysis and Moderation Regression Analysis (MRA). The study aimed to examine the relationship between dividend policies, funding decisions, free cash flow, company size, and investment opportunities on the value of shareholders in the non-cyclicals consumer sector.
Results
The results of this study showed that partially, dividend policy had a positive influence on the value of shareholders. This means that companies that distribute dividends regularly tend to attract more investors, thereby increasing the value of their shareholders. On the other hand, the decision of funding and the flow of free cash flows do not have a significant influence on the value of shareholders. However, the company's size actually has a negative impact on the value of shareholders. This suggests that large companies may face greater challenges in adapting market changes or managing high operational costs, which can negatively impact the value of their shareholders.
The Role of Investment Opportunities
Interestingly, investment opportunities act as moderation variables that can strengthen or weaken the relationship between dividend policies and shareholder value. This means that companies with good investment prospects can attract more attention from investors, thereby increasing the overall value of their shareholders. However, investment opportunities do not play a role in strengthening or weakening the relationship between funding decisions, free cash flows, and company size of shareholder value.
Conclusion
This study provides valuable insights for company managers and investors regarding the importance of dividend policies, funding decisions, free cash flows, company size, and investment opportunities in creating shareholders in the non-cyclicals consumer sector. The results of this study suggest that investors need to pay attention to the dividend policy implemented by the company, as this can have a positive impact on the value of their investment. Additionally, companies should optimize their funding decisions and free cash flows to create stability and increase investor confidence in the long run.
Additional Analysis
Dividend Policies
Dividend policies are often the main focus for investors because they provide indications of company stability and profitability. Companies that distribute dividends regularly show self-confidence in their ability to generate profits. In this context, companies that have good dividend policies tend to attract more investors, so as to increase the value of shareholders.
Funding Decisions and Free Cash Flows
The decision of funding and free cash flow becomes an aspect that must be optimized by the company. Although the results show that both do not have a direct impact on the value of shareholders, wise decisions in funding can create stability and increase investor confidence in the long run. A healthy free cash flow is a reflection of the company's ability to invest in business, pay debts, and provide dividends. Therefore, although not visible directly, these two elements remain important in the context of sustainable company management.
Company Size
The size of the company that has a negative effect on the value of shareholders can be caused by a number of factors. For example, large companies may face greater challenges in adapting market changes or managing high operational costs. Thus, although a large size is often considered a sign of strength, this does not always guarantee an increase in the value of shareholders.
Investment Opportunities
Finally, it is important to understand that investment opportunities can function as a driving factor that strengthens the effectiveness of dividend policies. Companies that have good investment prospects can attract more attention from investors, thereby increasing the overall value of shareholders. Therefore, stakeholders must consider a careful investment strategy to maximize this potential and optimize the value for shareholders.
Implications
This research provides valuable insights for company managers and investors regarding the importance of dividend policies, funding decisions, free cash flows, company size, and investment opportunities in creating shareholders in the non-cyclicals consumer sector. The results of this study suggest that investors need to pay attention to the dividend policy implemented by the company, as this can have a positive impact on the value of their investment. Additionally, companies should optimize their funding decisions and free cash flows to create stability and increase investor confidence in the long run.
Limitations
This study has several limitations. Firstly, the study only focused on the non-cyclicals consumer sector, which may not be representative of other sectors. Secondly, the study only analyzed the data from 2020 to 2022, which may not be representative of other time periods. Finally, the study only used a Purposive sampling method, which may not be representative of the entire population.
Future Research Directions
This study provides several future research directions. Firstly, future studies can examine the relationship between dividend policies, funding decisions, free cash flow, company size, and investment opportunities on the value of shareholders in other sectors. Secondly, future studies can analyze the data from other time periods to examine the stability of the results. Finally, future studies can use other sampling methods to examine the representativeness of the results.
Conclusion
In conclusion, this study provides valuable insights for company managers and investors regarding the importance of dividend policies, funding decisions, free cash flows, company size, and investment opportunities in creating shareholders in the non-cyclicals consumer sector. The results of this study suggest that investors need to pay attention to the dividend policy implemented by the company, as this can have a positive impact on the value of their investment. Additionally, companies should optimize their funding decisions and free cash flows to create stability and increase investor confidence in the long run.
Frequently Asked Questions (FAQs) about the Effect of Investment Opportunities on Shareholders in the Consumer Non-Cyclicals Sector
Q: What is the main focus of this study?
A: The main focus of this study is to analyze the effect of investment opportunities in moderating the relationship between dividend policies, funding decisions, free cash flow, and company size on the value of company shareholders in the non-cyclicals consumer sector listed on the Indonesia Stock Exchange between 2020 to 2022.
Q: What is the significance of dividend policies in this study?
A: Dividend policies are often the main focus for investors because they provide indications of company stability and profitability. Companies that distribute dividends regularly show self-confidence in their ability to generate profits. In this context, companies that have good dividend policies tend to attract more investors, so as to increase the value of shareholders.
Q: What is the role of funding decisions and free cash flows in this study?
A: The decision of funding and free cash flow becomes an aspect that must be optimized by the company. Although the results show that both do not have a direct impact on the value of shareholders, wise decisions in funding can create stability and increase investor confidence in the long run. A healthy free cash flow is a reflection of the company's ability to invest in business, pay debts, and provide dividends.
Q: What is the impact of company size on the value of shareholders in this study?
A: The size of the company that has a negative effect on the value of shareholders can be caused by a number of factors. For example, large companies may face greater challenges in adapting market changes or managing high operational costs. Thus, although a large size is often considered a sign of strength, this does not always guarantee an increase in the value of shareholders.
Q: What is the role of investment opportunities in this study?
A: Investment opportunities can function as a driving factor that strengthens the effectiveness of dividend policies. Companies that have good investment prospects can attract more attention from investors, thereby increasing the overall value of shareholders. Therefore, stakeholders must consider a careful investment strategy to maximize this potential and optimize the value for shareholders.
Q: What are the implications of this study for company managers and investors?
A: This study provides valuable insights for company managers and investors regarding the importance of dividend policies, funding decisions, free cash flows, company size, and investment opportunities in creating shareholders in the non-cyclicals consumer sector. The results of this study suggest that investors need to pay attention to the dividend policy implemented by the company, as this can have a positive impact on the value of their investment. Additionally, companies should optimize their funding decisions and free cash flows to create stability and increase investor confidence in the long run.
Q: What are the limitations of this study?
A: This study has several limitations. Firstly, the study only focused on the non-cyclicals consumer sector, which may not be representative of other sectors. Secondly, the study only analyzed the data from 2020 to 2022, which may not be representative of other time periods. Finally, the study only used a Purposive sampling method, which may not be representative of the entire population.
Q: What are the future research directions based on this study?
A: This study provides several future research directions. Firstly, future studies can examine the relationship between dividend policies, funding decisions, free cash flow, company size, and investment opportunities on the value of shareholders in other sectors. Secondly, future studies can analyze the data from other time periods to examine the stability of the results. Finally, future studies can use other sampling methods to examine the representativeness of the results.
Q: What is the conclusion of this study?
A: In conclusion, this study provides valuable insights for company managers and investors regarding the importance of dividend policies, funding decisions, free cash flows, company size, and investment opportunities in creating shareholders in the non-cyclicals consumer sector. The results of this study suggest that investors need to pay attention to the dividend policy implemented by the company, as this can have a positive impact on the value of their investment. Additionally, companies should optimize their funding decisions and free cash flows to create stability and increase investor confidence in the long run.