The Role Mediating of Debt Policy on the Relationship of Profitability and Stock Return: Evidence from Indonesia

Pramesti Wulandari Santoso, Deddy P Koesrindartoto, Perdana Wahyu Santosa

Bandung Institute of Technology (Indonesia), University of YARSI (Indonesia)

The purpose of this research is to discover the effect of profitability (ROA, ROE, and EPS) and debt policy (DER) on Stock Returns in Cosmetics and Household Goods Sub-Sector Companies Registered on the Indonesia Stock Exchange (IDX) for the period 2017-2021. This study uses secondary data, meaning that the data collected for the purpose of samples were downloaded data from the official website of the Indonesia Stock Exchange. The sampling technique used was the purposive sampling method. The research sample consisted of 6 manufacturing companies. Data analysis was done by testing the hypothesis either partially or simultaneously. The analytical method used is panel data regression analysis with a significant level of 5%. Based on the results of the research, partially ROA and ROE have a positive and significant effect on stock returns. At the same time, EPS and DER have a positive but not significant effect on stock returns. The results of the study simultaneously show that ROA, ROE, EPS, and DER affect stock returns.

Article link: https://www.asianinstituteofresearch.org/JEBarchives/the-role-mediating-of-debt-policy-on-the-relationship-of-profitability-and-stock-return%3A-evidence-from-indonesia