The Influence of Earnings Per Share and Interest Rate on Stock Prices in the Mediation of Firm Value (Study on Financial Companies Listed on the Indonesia Stock Exchange)

Abstract

This study aimed to examine and analyse a company’s characteristic variables. Its earnings per share and interest rates were the macroeconomic variables, and their effect on stock prices was mediated by firm value. This study used quantitative methods and path analysis of 30 financial companies belonging to banks and non-banks that have been listed on the Indonesia Stock Exchange. The results showed that the direct effect of earnings per share on stock price had a positive and significant coefficient. Indirectly or through mediation (intervening) the firm value variable showed that the effect of the earning per share variable on the stock price was obtained by a positive and significant coefficient value. Furthermore, the results showed that the direct effect of interest rate on stock price had a positive direction coefficient and was not significant. The results of the research indirectly or through mediation (intervening) of firm value variable indicated that the effect of interest rate variable on stock price was obtained by positive and insignificant coefficient value. Meanwhile, the firm value directly on the stock price has a significant effect.
 Keywords: firm value, macroeconomic, Indonesia Stock Exchange