The Effect of Leverage, Managerial Ownership, And Dividend Policy On Hedging Decisions In Manufacturing Companies

ABSTRACT : Companies that have risks due to exchange rate fluctuations need to manage these risks, one ofwhich uses hedging with derivative instruments. The use of hedging with derivative instruments can reduceexposure to the exchange rate so that it does not interfere with the value of the company’s assets and liabilities.This study aims to determine the effect of leverage, managerial ownership, and dividend policy on hedgingdecisions with derivative instruments. This research was conducted at manufacturing companies on the StockExchange in the 2016-2018 period with 133 companies as sample. Logistic Regression Analysis was used.Leverage and managerial ownership have negative but not significant effect on hedging decisions withderivative instruments, while dividend policy has a significant positive effect on hedging decisions withderivative instruments. Companies with high dividend payout ratios can hedge if the company has exposure tochanges in exchange rates.Keywords -leverage, managerial ownership, dividend policy, hedging