THE EFFECT OF PROFITABILITY, CAPITAL STRUCTURE, AND FORWARD-LOOKING INFORMATION ON INVESTMENT RISK

Muhammad Istiqlal JERICO; Wiwik UTAMI

doi:10.15637/jlecon.8.2.01

Authors

Muhammad Istiqlal JERICO Universitas Mercu Buana/HİNDİSTAN https://orcid.org/0000-0002-1919-8622
Wiwik UTAMI Universitas Mercu Buana/HİNDİSTAN https://orcid.org/0000-0002-2313-3346

DOI:

https://doi.org/10.15637/jlecon.8.2.01

Keywords:

Investment Risk, Profitability, Capital Structure, Forward-Looking Disclosure

Abstract

This study aims to provide empirical evidence of the effect of profitability, capital structure and forward looking information on investment risk. The population used in this research were all banking companies listed in the Indonesia Stock Exchange for the period 2016 to 2018. The sample selection used a random sampling method, and obtained 117 samples. The variables of profitability, capital structure, and forward-looking information refer to the elements of Integrated Reporting (2013) as an independent variable, and investment risk as the dependent variable. Data is collected from bank annual reports and share prices obtained from the website. The analysis method used is multiple linear regression. The results of the study concluded that profitability and capital structure had no effect on investment risk. Forward-looking disclosure has a negative effect on investment risk. This means that forward-looking disclosures can significantly reduce investment risk.

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