The Effect of DER and Interest Rate on Company Value

Abstract

The main goal of every company is to get the maximum profit. Besides that, when the company has reached a mature phase, the most difficult thing is how the company maintains its existence, stability, and faces competitors, so that the company can still be favored by investors. There are many factors that can affect a company's value, including DER and interest rates. The purpose of this study is to determine how the influence of these two factors on company value. The statistical analysis method used is panel data regression. Panel data regression analysis is a combination of cross section with time series data. Researchers are interested in examining the value of companies in the tourism sector which are listed on the Indonesia Stock Exchange (IDX) in 2013-2017. DER has no significant effect on stock prices. Interest rates have a significant effect on stock prices. DER and Interest Rate have a significant effect on Stock Prices.

Profitability as a Mediation for Problem Loans, Third-Party Funds, BI Rate on Company Value

“…Previous researchers showed that the impact of third parties on profitability was negligible by doing this (Rahayu & Pratiwi, 2020). In contrast to investors' perception that banks allocate their funds less than optimally, thereby contributing less than optimal profits, banks are obliged to provide additional profits to their customers.…”