The Mediating Role of Dividend Policy on the Effect of Tax Expense and Bonus Mechanism toward Profitability at Plantation and Food Crop Companies on Indonesia Stock Exchange Period 2017 – 2021

Abstract

Every company aims to gain a profit from its business. The capacity to gain profits can be shown from its profitability. With high profitability, the company becomes valuable for investors. For this reason, this research was conducted to determine the mediating role of Dividend Policy on the effect of Tax Expense and Bonus Mechanism toward Profitability. This research involved plantation and food crop companies on Indonesia Stock Exchange for the period 2017 – 2021. Sample selection was done by using the purposive sampling method. The data used is secondary data from www.idx.co.id. The data analysis process is carried out using the Structural Equational Model - Partial Least Square (SEM-PLS). The results show that Tax Expense has an effect with a negative relation direction to Profitability, Bonus Mechanism has no effect on Profitability, Dividend Policy has an effect with a positive relation direction to Profitability, Tax Expense and Bonus Mechanism have no effect on Dividend Policy, Dividend Policy cannot mediate the influence Tax Expense and Bonus Mechanism on Profitability.