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Journal : IIJSE

Influence of Return on Equity (ROE) and Debt Equity Ratio (DER) On Company Value and Share Prices Ramadhani Salsabila, Rima; Triyonowati, Triyonowati; Suhermin, Suhermin
Indonesian Interdisciplinary Journal of Sharia Economics (IIJSE) Vol 7 No 1 (2024): Sharia Economics
Publisher : Sharia Economics Department Universitas KH. Abdul Chalim, Mojokerto

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.31538/iijse.v7i1.4514

Abstract

This study aimed to examine and analyze the effect of Return On Equity (ROE) and Debt to Equity Ratio (DER) on firm value and the stock price in Real Estate and Property; through annual financial statements and the company's performance that were listed on the Investment Gallery of Indonesia Stock Exchange, STIESIA. Besides, it aims to examine and analyze the effect of Return On Equity and Debt to Equity Ratio on stock prices either directly or indirectly, through firm value. Since firm value was a mediating variable, it could measure the company's performance that was reflected in stock price. Furthermore, the population was 49 companies that were listed on the Gallery of Indonesia Stock Exchange, STIESIA during 2015-2021. The data collection technique used purposive sampling. In line with that, there were 11 Real Estate and Property companies as the sample. Additionally, the data analysis technique used multiple linear regression with path analysis and causal step, as well as SPSS (Statistical Product and Service Solutions). As a result, it is concluded that ROE and DER have a significant effect on firm value. Likewise, the firm value had a significant effect on the stock price. Both ROE and DER have an insignificant effect on the stock price. While DER could increase the risk for stakeholders. In other words, the higher the DER was, the lower the stock price (undervalued) would be. As a result, the stock won't interest the stakeholders. On the other hand, the firm value may not be the mediating variable of ROE on the stock price. However, the firm value could mediate DER on stock price (full mediation). In conclusion, Debt to Equity Ratio (DER) could encourage the stakeholders to invest their stocks in Real and Property companies.
Co-Authors Abdul Talib Bon Adya Hermawati Agus Sukoco Alfina Damayanti Anang Subardjo Anang Subardjo Anita Kartika Sari Anizzibda Chahya Khildani Ardi, Nadia Khaira ariyati, Yannik Astri Ayu Purwati Astri Ayu Purwati Astuti Setiyani Azizah, Muftiyatul Basuki, Aiyi Apresia Bayu Fajar Susanto Bon, Abdul Talib Budianto BUDIYANTO Budiyanto Budiyanto Budiyanto Budiyanto Budiyanto Budiyanto Candraningrat, Candraningrat Choirul Anam Depari , Surya Safari Sembiring Dewi Urip Wahyuni Dharmasetiawan Dian Palupi Djawoto Djawoto Djawoto, Djawoto Donanda, Pronica Imel Erina Febianti Trianjani Fitri Rohkmalia Gandhi Sutjahjo Hakim, Buyung Nul Hening Widi Oetomo Irdiana, Sukma Irma Yanti Isti Soleharti Joko Suyono Juni Gultom, Juni Gultom Kalvin Kristanto Kartika Dewi S. S. Karyanto, Budi Khuzaini Khuzaini Kurniawan, Gogi Layla Hafni Lering, Leonardus Frediyanto Moat Lestariningsih, Marsudi Lilis Ardini Lutfiyah Lutfiyah Lutfiyah Lutfiyah M. Ikhsan Setiawan Mariyana Mariyana Mentari, Mulyananda Dwi Mohammad Faisal Muhammad Rafli Azlam Azzuhri Muhammad Sofyan Do Musa Okto Aditya Suryawirawan Pinayungan, Doni Pompong Budi Setiadi Pribadiyono Pribadiyono Purba, Moden Rahayu Puji Suci Rahayu, Rika Rahmawati*, Mia Ika Rahmawati, Mia Ika Ramadhani Salsabila, Rima Ramadhani, Yesa Cahayaning Ramli, Rimayang Ramon Zamora, Ramon Ratna Wardani Riris Setyo Sundari Riza Bahtiar Sulistyan Rizkiyanti, Meilany Roby Sambung S, Ana Sopanah Saputri, Yulita Sari, Arini Kurnia Sembhodo, Abimanyu Tuwuh Shabrie, Wiwiek Srikandi Simanjuntak, Edita Yolanda Malika Singgih Adhi Prasetyo, Singgih Siregar, Hanafi Sri Mulyati Subardjo, Anang Sugiono Sugiono Sumasto, Hery Sunaryadi Suprapto, Yetty Fitria Surya Safari SD Suryawirawan, Okto Aditya Suwitho, Suwitho tanjung, rona Teddy Chandra Tri Wahjoedi Triyonowati Triyonowati Triyonowati, Triyonowati Widyawati Wijaya, Evelyn Wisnu, Nurwening Tyas Wiwiek Srikandi Shabrie Wulandari Harjanti Yesa Cahayaning Yesa Cahayaning Rarnadhani Yuliati, Eka Zahro, Mar'atus Zahro, Mar’atus Zessicha Belliana Putri