THE FACTORS INLUENCING OF EQUITY RISK PREMIUM OF INDONESIAN PUBLIC LISTED COMPANIES

Saiful, Saiful (2014) THE FACTORS INLUENCING OF EQUITY RISK PREMIUM OF INDONESIAN PUBLIC LISTED COMPANIES. In: Borderless Economy: Opportunities and Challenges for Businesses in Southeast Asia, 13-14 October 2011, Fakultas Ekonomi, Universitas Bengkulu.

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Abstract

The purpose of this study is to examine the impact of audit tenure, firm size,book to market equity ratio, leverage, beta and earnings quality on equity risk premium of Indonesian public listed companies. Based on purposive sampling method, 45 manufacture companies was selected from Indonesian public listed companies.This study found that book to market equity and leverage positively and significantly influence equity risk premium, while beta negatively and significantly influence equity risk premium. These findings indicate that equity risk premium increase as book to market equity increase, because the highest book to market equity ratio show that companies is not growth, so company’s risk will be high. Meanwhile, the highest leverage ratio show that companies have financial distress and its will increase the company’s risk. In contras, higher beta lead to lower equity risk premium, it may be effected by emerging market in Indonesia feature.

Item Type: Conference or Workshop Item (Paper)
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Faculty of Economy > Department of Management
Depositing User: 021 Nanik Rahmawati
Date Deposited: 01 Apr 2014 11:24
Last Modified: 01 Apr 2014 11:24
URI: http://repository.unib.ac.id/id/eprint/7064

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