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

International Journal of Business Society, Vol. 3, Issue 5
Dr. Imas Maesaroh
Capital structureProfitabilityShare prices
PDFRegular IssueDOI: 10.30566/ijo-bs/2019-11-2
3Volume
5Issue

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.

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Article Information

Article Details
Volume & IssueVol. 3, Iss. 5
Publication DateNov 10, 2019
Authors
Dr. Imas Maesaroh
DOI
10.30566/ijo-bs/2019-11-2
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Determinant of Capital Structure on Profitability and Share Prices of Banks Listed in IDX | International Journal of Business Society