The Effect of Right Issues on company Financial and Stock Performance

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Alvina, Samantha (2019) The Effect of Right Issues on company Financial and Stock Performance. Project Report. School of Management IPMI, Jakarta Selatan. (Unpublished)

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The Corporate in the capital market engage in rights issue as an alternativeof generating additional capital to finance future growth and expantions rights issues offiers the exiting shareholders. This researc aims to examine the effect of rights issues on the performance of the companies listed at Indonesia Stock Excange (IDX). The study mainly used secondary data collected from the official website of the IDX as well as from financial reports published by companies. The study was conducted using the event study method, and the data were analyzed through descriptive statistical analysis and hypothesis testing. Parametric analysis tools used for hypothesis testing are one sample 1-test, paired sample t-test and simple linear regression with dummy variables. Analysis is carried out for data five days before up to five days after the day of implementation of the rights issue. The population of this study includes all companies listed on the IDX, consisting of 169 companies that carried out a rights issue in the period 2006 to 2015. From the purposive sampling method, 31 companies were selected for further observation. The results showed that the rights issue had no effect on the performance of stock prices before, during and after the implementation of the rights issue, with the exception of when there were positive abnormal returns on the implementation of the rights issue. The study also found that the rights issue did not affect profitability and there were no significant differences in the company's Return on Assets and Returm on Equity. This study recommends that publishing companies focus on delivering comprehensive and positive information through announcements about rights issues, and that investors regularly and closely monitor company performance in order to make rational and informed investment decisions. Keywords: Rights Issue, Stock Price Performance. Profitability, Abnormal Return, Return on Assets, Return on Equity

Item Type: Monograph (Project Report)
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
H Social Sciences > HG Finance
Divisions: Library > GFP (Group Field Project)
Depositing User: Putri Dwi Novia
Date Deposited: 17 Jan 2020 08:25
Last Modified: 18 Jan 2020 07:07

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