Open AccessEffect of Leverage on Profitability and Share Return with Intervening Asset Growth
Author(s) -
Akhmad Syarifudin
Publication year - 2021
Publication title -
duconomics sci-meet
Language(s) - English
Resource type - Journals
ISSN - 2798-6136
DOI - 10.37010/duconomics.v1.5444
Subject(s) - leverage (statistics) , monetary economics , return on assets , stock exchange , debt , profitability index , business , dividend , debt ratio , financial system , economics , finance , mathematics , statistics
Fundamental factor analysis is important to determine the company's performance. The purpose of this study is to determine the effect of leverage on profitability & stock prices through Asset Growth. The population of 664 issuers used 300 purposive samples covering all sectors on the 2011-2019 BEI. The research method uses SEM-Smart PLS path analysis. The results in group I (DAR 50%) DAR had a negative effect on AG&ROA, but did not affect ROE. While AG affects PBV, but does not affect ROE. The result of an indirect relationship AG mediates DAR to RS through PBV, but AG does not mediate DAR to RS through ROE. It shows that an increase in debt will reduce asset growth but will not affect dividends and vice versa, while an increase in asset growth will increase stock prices. This finding proves that the optimal capital structure is effective in improving company performance on the Indonesia Stock Exchange. Companies that have low debt and experience asset growth tend to produce high profitability and their share prices increase