American Journal of Humanities and Social Sciences Research (AJHSSR) 2021 AJHSSR Journal Page | 47 American Journal of Humanities and Social Sciences Research (AJHSSR) e-ISSN :2378-703X Volume-5, Issue-4, pp-47-53 www.ajhssr.com Research Paper Open Access The Effect of Investment Decisions, Dividend Policy and Profitability on Firm Value in the Indonesian Manufacturing Companies NadyaAliffiaBasuki Putri 1 , Triyani Budyastuti 2 Faculty of Economics and Business, MercuBuana University,Jakarta, Idonesia ABSTRACT : This study aims to determine and analyze the effect of Investment Decisions, Dividend Policy, and Profitability on Firm Value in Manufacturing Companies listed on the Indonesia Stock Exchange in 2016- 2018. The sample used was Manufacturing Companies on the Indonesia Stock Exchange during 2016-2018 period with a sample of 134 companies. The sampling method uses Purposive Sampling. This study use multiple linear regression analysis techniques. Based on the research conducted it can be concluded that the Investment Decition has no effect on Firm Value, Dividend Policy and Profitability has positive effect on Firm Value. Keywords: Firm Value, Investment Decision, Dividend Policy, and Profitability. I. INTRODUCTION In this current era of globalization, more and more companies havesprung up,especially in Indonesia. The existence of the capital market in Indonesia is very much needed by companies because by issuing shares on the stock exchange, then this will attract investors to invest. The capital market is one of the sources of funding for the implementation of national economic developmentand become a source of state revenue. The capital market is seen as an effective means of accelerating national development, because the capital market is a forum for the community to channel funds to productive sectors. By investing public funds or investors will get a certain level of profit (return). Meanwhile, the company will use the investment funds for the company's operational activities while increasing the company's value. With the occurrence of buying and selling investment instruments are able to influence the wheels of the Indonesian economy and increase the welfare of the community. In the Indonesian economy, the manufacturing industry plays an important role in efforts to boost the value of investment and exports so that it becomes a mainstay sector for accelerating national economic growth.The food and beverage industry, the textile and clothing industry, the automotive industry, the chemical industry, and the electronics industry are some of the manufacturing sub-sectors that have the strongest influence. The manufacturing industry sector is one of the pillars of the Indonesian economy, and has contributed significantly to Indonesia's economic growth. Currently, many companies are listed on the Indonesia Stock Exchange.These various choices make investors more observant in choosing company shares.There are several formulas that can be used by investors in determining their investment, one of these formulas is PBV (Price Book Value). PBV is an investment valuation ratio that is often used by investors to compare the market value of shares with their book value in making investment decisions. The PBV ratio shows how many shareholders are financing the company's net assets.PBV ratio looks to the equity side of the company, therefore PBV can be defined as the ratio of money comparing the market value of a stock to the book value per share (the value of the shares when the shares are sold for the first time to investors ). Book value is the value of the company's assets listed in the financial statements or balance sheet and is calculated by deducting the company's liabilities from its assets. That is, the PBV ratio can show what investors or shareholders will get after the company is sold with all debts that have been paid off. By knowing PBV, the community (stakeholders) can identify which stocks are fair, undervalued, and overvalued. The public (stakeholders) can also find out which share prices have the potential to rise in the future and the company's shares are worth to buy.So that it will cause the company's performance to increase, which results in an increase in stock prices, which means that the company's value will also increase.