Jurnal EFFECT OF EARNINGS VOLATILITY ON COST OF DEBT

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Jurnal EFFECT OF EARNINGS VOLATILITY ON COST OF DEBT

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Pongrangga, Goldia Liku Sirupang
  

(2019)

EFFECT OF EARNINGS VOLATILITY ON COST OF DEBT.

    Thesis S1, UAJY.
  

  

Abstract

The empirical research tests the relationship between earnings volatility
and cost of debt. The population of this research consist of all industries listed in
Indonesian Stock Exchange and ICMD from 2012-2016 year period. Sampling
The chosen method is purposive sampling and there are 1,100 samples obtained from
eight industries sector in Indonesia. The researcher used multiple regressions
analysis to test the hypothesis.
The research results show that EBIT and EBITDA as the proxies for
measuring earnings volatility has a positive effect on the cost of debt. Firms'
profitability, liquidity and solvency are the three control variables where
profitability has a negative influence on the cost of debt but liquidity and solvency
have non-significant influence on the cost of debt. Furthermore, the results of the
Study indicates that there is a difference in the effect of earnings volatility on cost
of debt that occurs in each industrial sector in Indonesia based on the Jakarta
Stock Industrial Classification (JASICA) classification. Based on the results, the
industrial sector which has a significant effect between earnings volatility and cost
of debt is agriculture and miscellaneous sector.

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