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Investor’S Stock Selection Decision: Influence Of Profitability, Company Size, And Raroc

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Listed:
  • Tigor Sitorus
  • Kendo Yuganda

    (Universitas Bunda Mulia, Indonesia
    Universitas Bunda Mulia, Indonesia)

Abstract

This study aims to investigate and analyze the investor’s stock selection decision that are influenced by profitability, company size, and RAROC on the companies listed on the Indonesia Stock Exchange. The sampling method used was purposive sampling. The sample in this study were companies listed on the LQ-45 Index for the period 2015-2017. This study used structural equation model analysis (SEM) with AMOS software version 22.00 against 108 financial report data from 36 companies that were listed in the LQ-45 Index in a row for 3 years as a sample. The results of this study indicate that; 1). Investor’s stock selection decision are influenced positively and significantly by profitability, 2). Investor’s stock selection decision are influenced negatively and not significantly by company size. 3). Investor’s stock selection decision is affected negatively and not significantly by RAROC.

Suggested Citation

  • Tigor Sitorus & Kendo Yuganda, 2019. "Investor’S Stock Selection Decision: Influence Of Profitability, Company Size, And Raroc," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 8(2), pages 67-86.
    • Handle: RePEc:cpn:umkcjf:v:8:y:2019:i:2:p:67-86
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    References listed on IDEAS

    as
    1. Ramarow, Sirivige, 2017. "The Relationship between Profitability and the Risk Factors and other Macroeconomic Factors," MPRA Paper 78625, University Library of Munich, Germany, revised 19 Apr 2017.
    2. Catherine Fuss & Philip Vermeulen, 2008. "Firms' investment decisions in response to demand and price uncertainty," Applied Economics, Taylor & Francis Journals, vol. 40(18), pages 2337-2351.
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    More about this item

    Keywords

    LQ45; stock; selection; decision; investor; RAROC; profitability; size;
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