The Effect of Capital Structure and Dividend Policy on Stock Returns with Corporate Social Responsibility as Moderation Variable

Sudana, Ni Putu Sherlina Andaresta and Dwijayanti, Ni Made Ayu and Nurhayanti, Ketut (2022) The Effect of Capital Structure and Dividend Policy on Stock Returns with Corporate Social Responsibility as Moderation Variable. Repositori Politeknik Negeri Bali.

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Abstract

Companies whose primary source of funding is debt. This is because it can increase the company's risk; retained earnings might be used as an alternative to reduce this risk. The utilization of retained earnings did not receive investor approval. The use of retained earnings will result in a reduction in dividend payments. This decreases investor interest, which in turn reduces the firm's stock return; hence, the company must adopt the most advantageous capital structure and dividend policy decisions in order to benefit all parties. In this age of globalization, investors rely their investment decisions not only on a company's financial statements, but also on its ability to preserve commercial continuity. Investors can determine this by examining the disclosure of corporate social responsibility. The purpose of this study was to determine the impact of capital structure and dividend policy on stock returns in the manufacturing sector using corporate social responsibility as a moderating variable. This study used a quantitative associative method. This study's sample was selected using the approach of purposive sampling, and included 32 manufacturing businesses listed on the Indonesia Stock Exchange that were able to distribute dividends in 2018-2020. Descriptive statistics, classical assumption tests, Moderated Regression Analysis (MRA), Significance Test, and Determination Test were utilized for data analysis. According to the findings of this study, the capital structure variable has a negative impact on stock returns. The association between capital structure and stock returns is bolstered by increased disclosure of corporate social responsibility. The dividend policy affects stock returns positively. However, the rise in corporate social responsibility has can not moderate the correlation between dividend policy and stock returns.

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