ABSTRACT
In the development and progress of the business world, competition encourages companies to have a competitive advantage. One of these is reflected in the company’s dividend policy. This study aims to examine the effect of profitability, investment opportunity set (IOS), free cash flows (FCF), and collateralizable assets (CA) on dividend policy. The population were consumer goods companies listed on the Indonesia Stock Exchange from 2013–2015. The number of samples used in the study were 19 companies. The results showed that profitability and IOS variables had a significant negative effect on corporate dividend policy, while FCF and CA had no significant effect on company dividend policy. This implies that a residual theory of dividend has to be applied in managing the dividend decision.
