Effects of Managerial Ownership Structure and Dividend Policy on Company Value through Debt Policy: A Case Study on Pharmaceutical Companies Listed on Indonesia Stock Exchange (IDX) in 2013-2017

Abstract

The objective of this research is to know: 1) the effect of managerial ownership structure and dividend policy on debt policy; 2) the effect of debt policy on company value; 3) the effect of managerial ownership structure on company value through debt policy ;and 4) the effect of dividend policy on company value through debt policy. This research used quantitative approach using secondary data in the form of publication published by Indonesia Stock Exchange (IDX). The population of this research was all manufacturing companies of Pharmaceutical sub-sector listed on the IDX. The sampling was conducted by using purposive sampling method and the data was analyzed by using SEM (Structural Equation Modeling) technique. The findings show that: 1) managerial ownership structural has a positive and significant effect on debt policy. This finding is in line with Wahidahwati' sfinding; 2) dividend policy has a negative and significant effect on debt policy; 3) debt policy has a negative and significant effect on company value; and 4) managerial ownership structure contributes negatively and significantly on company value through debt policy. The implication of this research is that the company should pay attention to any factors making investors feel more attracted to invest their fund so that the company value can be increased.