THE INFLUENCE OF EXCHANGE RATES, DEBT TO EQUITY, AND RETURN ON EQUITY ON STOCK RETURNS: A CASE STUDY OF HEALTH AND PHARMACEUTICAL SECTOR COMPANIES LISTED ON IDX

Abstract

This study aims to examine how the independent variables of the exchange rate, debt to equity, and return on equity affect stock returns as the dependent variable. The type of research approach used is quantitative associative data. The data used is secondary data in the form of exchange rates and financial reports published from the IDX website. The sampling method used was purposive sampling, with a total population of 25 Health and Pharmaceutical companies listed on the IDX (Indonesia Stock Exchange), and the samples used in this study were 14 companies. The research method used in this study is multiple regression testing the hypothesis using the t test and F test and the data is processed with the help of the Econometric Views (EViews) program. The results of the analysis of this study based on the t test, the results of the exchange rate (X1) probability are 0.1287 so it is concluded that it does not affect stock returns, and return on equity (X3) shows a probability of 0.1453 on stock returns so it is said that return on equity is not significant to stock returns. For debt to equity (X2), the results show a probability of 0.0150 so that debt to equity has a significant negative effect on stock returns. The results of the F test found that the exchange rate, debt to equity and return on equity affect stock returns simultaneously.

Keywords

• exchange rates
• debt to equity (der)
• return on equity (roe)
• stock returns