THE EFFECT OF LIQUIDITY AND PROFITABILITY ON FIRM VALUE MEDIATED BY DIVIDEND POLICY

ABSTRACT: The purpose of this study is to examine the effect of liquidity and profitability on firm valuewhich is mediated by dividend policy. The firm value is the selling firm value that is worthy of consideration byinvestors in order to invest their funds in a company. In a company, increasing firm value is very important,because it can increase the prosperity of shareholders. This research was conducted at banking companies on theIDX for the 2015-2019 period. The number of samples used in this study were 11 companies and the samplingmethod in this study was using purposive sampling. The analysis technique used in this research is path analysiswith the help of SPSS software. The results of this study indicate that liquidity has a significant negative effecton firm value, while profitability has a significant positive effect on firm value and dividend policy is unable tomediate liquidity and profitability on firm value.

Keywords: Firm value; Liquidity;Profitability;Dividend Policy