Determinant of Capital Structure on Profitability and Share Prices of Banks Listed in IDX

Dr. Imas Maesaroh

Abstract: The aim of the study is to find out the determinant of capital structure on profitability and share prices of banks listed on IDX. The study used Path analysis. Results indicated an insignificant effect of capital structure (5.4%), and yet significant effect of profitability (49.3%), both on stock prices, which included a direct effect (50.7%) and indirect effect (1.4%). Through profitability as a moderator variable, the effect of DER and DAR on share prices was -15% and -3.1%, respectively. This study has documented how path analysis extended the scope of what affected the share prices. Future studies are expected to broaden this scope still further and reveal effect patterns for other variable(s) not previously observed. The selection of other variables that can affect the stock price which results in 94.6% is not observed in this study.

FULL TEXT PDF 1-14 ] DOI: 10.30566/ijo-bs/2019-11-2

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