Leverage and Dividend Policy: Evidence from the Indonesian Stock Exchange

Aims: This research aims to determine the effect of ownership based on managerial and institutional on the leverage and corporate dividends.

Study Design: We analyzed the correlation between leverage and dividends interaction in several companies listed on the Indonesian Stock Exchange.

Methodology: Some hypotheses were created and then tested using an equation model. Some equations used in this model can generate an equation system that can describe the variables' dependencies. Furthermore, the two-stage least square (TSLS) method was used as the estimation technique.

Results: A high level of managerial ownership can decrease leverage and corporate dividend payments. Also, high external capital is needed to increase dividend payments to achieve high asset growth.

Conclusion: In contrast, high sales growth can decrease the leverage, but increased profitability may lower the dividend payments. Using high force means reducing dividend payments. This research provides information and data as a basis for consideration, support, and sources of thought to management as decision-makers to improve company performance and business development. This research implies that companies can use it as a reference in making financial decisions about the company's business strategy to improve its performance to have a competitive advantage and avoid financial distress.