MISPRICE, LEVERAGE AND STOCK BUYBACK: EVIDENCE IN INDONESIA
Dublin Core
Title
MISPRICE, LEVERAGE AND STOCK BUYBACK: EVIDENCE IN INDONESIA
Subject
stock buyback, misprice, leverage
Description
Cash distribution by stock buyback is one ways to increase stockholder wealth. This study is to analyze the effect of misprice (misvaluation) and leverage on stock buyback. Limited prior study
discussed about stock buyback and misprice especially in Indonesia, theoritically, in Indonesia not only firm with undervalue stock do stock buyback but also firm with overvalue stock. Stock buyback can increase the stock prices, but the implementation in Indonesia is still small. Non-financial firms listed on the Indonesia Stock Exchange from 2010 to 2017 used in this study. Samples were taken by a purposive sampling method based on certain criteria. The data analysis techniques use multiple linear regression statistical analysis. The results showed that misprice has a positive effect on buyback. The different thing found in Indonesia because overvalued firms hold stock buyback. Leverage has a negative effect on stock buyback. Firms with leverage below the target tend to do a stock buyback. In addition, the stock buyback also used to correct prices (for undervalued stock to be fair). The implication in this study is stock buyback not only viewing to correct prices but also giving a signal to the market that the firm is in a good fundamental condition.
discussed about stock buyback and misprice especially in Indonesia, theoritically, in Indonesia not only firm with undervalue stock do stock buyback but also firm with overvalue stock. Stock buyback can increase the stock prices, but the implementation in Indonesia is still small. Non-financial firms listed on the Indonesia Stock Exchange from 2010 to 2017 used in this study. Samples were taken by a purposive sampling method based on certain criteria. The data analysis techniques use multiple linear regression statistical analysis. The results showed that misprice has a positive effect on buyback. The different thing found in Indonesia because overvalued firms hold stock buyback. Leverage has a negative effect on stock buyback. Firms with leverage below the target tend to do a stock buyback. In addition, the stock buyback also used to correct prices (for undervalued stock to be fair). The implication in this study is stock buyback not only viewing to correct prices but also giving a signal to the market that the firm is in a good fundamental condition.
Creator
Elliv Hidayatul Lailiyah, Ika Purwanti, Muhammad Sulton
Source
DOI: http://dx.doi.org/10.26418/jebik.v9i2.41547
Publisher
Univ. Tanjungpura
Date
28-08-2020.
Contributor
Sri Wahyuni
Rights
P-ISSN : 2087-9954 , E-ISSN : 2550-0066
Format
PDF
Language
English
Type
Text
Coverage
Jurnal Ekonomi Bisnis dan Kewirausahaan (JEBIK) Univ. Tanjungpura 2020
Files
Collection
Citation
Elliv Hidayatul Lailiyah, Ika Purwanti, Muhammad Sulton, “MISPRICE, LEVERAGE AND STOCK BUYBACK: EVIDENCE IN INDONESIA,” Repository Horizon University Indonesia, accessed December 28, 2024, https://repository.horizon.ac.id/items/show/5916.