The Effect of Gearing, Price Earning Ratio, Interest Rate, Risk on Abnormal Return

  • Muhammad Aldo Universitas Airlangga, Surabaya, Indonesia
Keywords: Gearing, Price Earning Ratio (PER), Interest Rate, Risk, Abnormal Return

Abstract

The purpose of the research is to analyze the effect of gearing, Price Earning Ratio (PER), interest rate, and risk on abnormal return. The research was conducted using secondary data. The sampling technique used was purposive sampling. The object of the research is to list companies on the Indonesia stock exchange from 2017-2020. The analysis method used is multiple linear regression analysis. By using regression analysis, the study provides evidence that all the independent variables such as gearing, Price Earning Ratio, and risk haven’t a significant positive effect on abnormal returns. Only one variable which is interest rate that has a significant positive effect on abnormal returns.

Downloads

Download data is not yet available.

References

Acheampong, Prince, Evans Agalega, and Albert Kwabena Shibu. 2014. “The Effect of Financial Leverage and Market Size on Stock Returns on the Ghana Stock Exchange: Evidence from Selected Stocks in the Manufacturing Sector.” International Journal of Financial Research 5 (1). https://doi.org/10.5430/ijfr.v5n1p125.

Bishara, Halim I. 1998. “No Title.” Stock Splits, Stock Returns and Trading Benefits on Canadian Stock Market’s, no. . Akron Business and Economic Review: 57–65.

Cascino, Stefano, Mark Clatworthy, Beatriz García Osma, Joachim Gassen, Shahed Imam, and Thomas Jeanjean. 2014. “Who Uses Financial Reports and for What Purpose? Evidence from Capital Providers.” Accounting in Europe 11 (2): 185–209. https://doi.org/10.1080/17449480.2014.940355.

Fama, Eugene F. 1998. “Market Efficiency, Long-Term Returns, and Behavioral Finance1The Comments of Brad Barber, David Hirshleifer, S.P. Kothari, Owen Lamont, Mark Mitchell, Hersh Shefrin, Robert Shiller, Rex Sinquefield, Richard Thaler, Theo Vermaelen, Robert Vishny, Ivo Welch.” Journal of Financial Economics 49 (3): 283–306. https://doi.org/10.1016/s0304-405x(98)00026-9.

Imamah, Nur, Tsui Jung Lin, Suhadak, Siti Ragil Handayani, and Jung Hua Hung. 2019. “Islamic Law, Corporate Governance, Growth Opportunities and Dividend Policy in Indonesia Stock Market.” Pacific Basin Finance Journal 55 (December 2017): 110–26. https://doi.org/10.1016/j.pacfin.2019.03.008.

Levi, Kristina. 2010. “Investment Analysis and Portfolio Management Leonardo,” 1–166. http://www.bcci.bg/projects/latvia/pdf/8_IAPM_final.pdf.

Michael C. Ehrhardt, Eugene F. Brigham. 2018. Financial Management, Theory and Practice. Edited by Jack W. Calhoun. South-Weatern Cengage Learning. Joe Sabatino. https://doi.org/10.1002/9781119057093.app4.

Muradoǧlu Yaz Gulnur, Y. G., and Sheeja Sivaprasad. 2012. “Capital Structure and Abnormal Returns.” International Business Review 21 (3): 328–41. https://doi.org/10.1016/j.ibusrev.2011.03.007.

Sadikin, Ali. 2011. “Analisis Abnormal Return Dan Volume Perdagangan Saham, Sebelum Dan Sesudah Peristiwa Pemecahan Saham.” Jurnal Manajemen Dan Akuntansi 12 (1): 25–34.

Strong, Norman C., and Xinzhong G. Xu. 1997. “Explaining the Cross-Section of UK Expected Stock Returns.” British Accounting Review 29 (1): 1–23. https://doi.org/10.1006/bare.1996.0030.

Ziobrowski, Alan J., James W. Boyd, Ping Cheng, and Brigitte J. Ziobrowski. 2011. “Abnormal Returns from the Common Stock Investments of Members of the U.S. House of Representatives.” Business and Politics 13 (1): 661–77. https://doi.org/10.2202/1469-3569.1308.

Published
2022-07-31
How to Cite
Aldo, M. (2022). The Effect of Gearing, Price Earning Ratio, Interest Rate, Risk on Abnormal Return. Indonesian Interdisciplinary Journal of Sharia Economics (IIJSE), 5(2), 751-767. https://doi.org/10.31538/iijse.v5i2.2195