Corporate Dividend Behavior: Exploring the Drivers of Payout Decisions

This study examines the determinants of dividend behavior among companies listed on the Indonesian Stock Exchange's Kompas 100 index from 2018 to 2022. Utilizing purposive sampling, the research analyzes 46 companies to determine the impact of financial indicators such as return on equity, debt-to-equity ratio, cash ratio, firm size on dividend payout ratios and dividend payout patterns. Multilinear regression analysis reveals that return on equity and firm size positively influence dividend payout ratios, while debt-to equity ratio and cash ratio show no significant effect. Furthermore, multinomial regression analysis, using logistic and probit models, reveals different factors that influence different dividend payment patterns among companies in Indonesia. A higher cash ratio significantly lowers the probability of a company being in the non dividend paying category compared to regular dividend payers. When comparing irregular dividend payers with regular payers, a higher return on equity will decrease the likelihood of distributing dividends, while a higher debt-to-equity ratio and larger firm size will increase the likelihood of paying dividends.