This study aims to examine the effect of institutional ownership and
profitability on firm value with dividend policy as an intervening variable. The
object of this study uses manufacturing companies listed on the Indonesia Stock
Exchange during the period 2015-2017. The data used are secondary data in the
form of annual financial statements for the period 2015-2017. The sampling
technique used in this study was purposive sampling while the data analysis
techniques used in this study were descriptive statistics, classic assumption tests,
multiple regression analysis, hypothesis testing and sobel test. The results of the
analysis show that profitability has a positive and significant effect on dividend
policy and firm value, institutional ownership has a significant negative effect on
firm value, while institutional ownership does not have a significant effect on
dividend policy and dividend policy also does not have a significant effect on firm
value. Meanwhile dividend policy cannot mediate the relationship between
institutional ownership and profitability to firm value.