ISSN 2460-0598 The 3rd International Multidisciplinary Conference on Social Sciences

(IMCoSS 2015) Bandar Lampung University (UBL)

THE INFLUENCE OF INFLATION, GDP GROWTH, SIZE, LEVERAGE,

AND PROFITABILITY TOWARDS STOCK PRICE ON PROPERTY
AND REAL ESTATE COMPANIES LISTED IN INDONESIA STOCK
EXCHANGE PERIOD 2005-2013
1*
Herry Goenawan Soedarsa and 2**Prita Rizky Arika
1’2
Accounting Study Program, Faculty of Economics, Bandar Lampung University
*
Corresponding author e-mail: [email protected]
**
Corresponding author e-mail: [email protected]

Abstract This study aims to identify and analyze the effect of inflation, GDP growth, firm size, leverage and
profitability towards the stock price on the property and real estate sectors listed in Indonesia Stock Exchange
2005-2013. The first hypothesis is the inflation rate influences negatively on the stock price, the second
hypothesis is GDP growth influences positively on the stock price, the third hypothesis is the firm size influences
positively on the stock price, the fourth hypothesis is leverage influences negatively on the stock price, and the
fifth hypothesis is profitability influences positively on the stock price. Stock prices measured by the Annual
Closing Price are seen in the company's annual financial statements.
The sample of this study is the industrial property and the real estate listed in Indonesia Stock Exchange in
2005-2013. The sampling technique used is purposive sampling in order to obtain a total sample of 10
companies and real estate properties that meet the criteria established for research sample. Inflation is
measured by the consumer price index rate, GDP growth is seen from the changes in nominal GDP, the size of
the Company is measured by total sales, leverage is measured using the Debt Equity Ratio (DER) and
profitability is measured by Return on Assets (ROA). Data analysis techniques is performed with the classical
assumption, hypotheses are tested using multiple linear regression analysis using SPSS 18.0 for windows. The
results showed that in partial inflation, GDP growth, and leverage have no effect on stock prices, while the size
of the company and profitability have positive effect on the stock price on the company property and real estate
sectors listed in Indonesia Stock Exchange.

Keywords: Inflation, GDP Growth, Company Size, Leverage, Profitability, Stock Price

1. INTRODUCTION company's stock price fell, but in fact, it is the

The development of a country's capital markets cannot opposite. External factors that reflect a country's
be separated from the development of the country's economy do not always make stock investments to be
economy. Economic growth and business conditions pessimistic, when unfavourable economic conditions
are factors that affect the stock market reaction. The do not always cause the stock price fell.
reaction of the stock market in this case reflected in
the stock price is heavily influenced by economic 2. REVIEW OF LITERATURE
growth and business conditions of a company. Both 2.1 THEORY
high economic growth and good business conditions Signaling Theory
are expected to impact on the stock price. Stocks are Hartono (2000) in his book "Teori Portofolio dan
investments that can generate high profits, but the risk Analisis Saham" mentioned that information
is also high. Investors’ ability to understand and published as an announcement would give a signal to
forecast the macroeconomic conditions in the future investors in making investment decisions. If the
will be useful in making profitable investment announcement contains a positive value, it is expected
decisions. Investors should undertake appropriate that the market will react when the announcement is
analysis of stocks that generated greater gains than received by the market. At the time the information
obtained risks. The establishment of stock prices was announced and all market participants have
cannot be separated from accounting information, received such information, market participants must
although the actual stock price formation is a present first interpret and analyze that information as either
judgment from the seller or buyer. One of factors that good signals (good news) or poor signal (bad news). If
affects the interest of investors to invest in stocks is the announcement of such information is a good signal
reflected in the condition of the company's financial for the investors, there is a change in the volume of
statements. Property companies and real estate are stock trading. All investors need information to
business organizations that experience rapid growth in evaluate the relative risk of each company so that they
recent years. The views of investors about stock can diversify the investment portfolio and the
investments in this business will provide a return that combination of risk preferences as desired by
is promising because Indonesia is the fourth most investors in investing.
populous country in the world, so the daily needs will Random Walk Theory
be more attractive and land prices will also increase. Random walk is a term that first appeared in the
Unfavourable conditions do not always make a correspondent in Nature that discussed how the

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optimal strategy finds drunken people abandoned in information to the decision models used by investors
the middle of the field. The trick is to start looking in to make decisions to buy, hold, or sell Stocks. Stock
the first place where drunken people are placed and prices that occurred in the capital market always
the person will walk in the direction that is not fluctuate from time to time. Fluctuations in the price
predictable and random (Pratikno, 2009). of a stock will be determined by the forces of supply
This theory states that the change in price of a stock or and demand.
the overall market that has occurred cannot be used to The Analysis of Stock Price
predict movements in the future. In other words, this In general, there are two kinds of analysis; they are
theory states that stock prices move in the direction Fundamental Analysis and Technical Analysis. Both
that is random and unpredictable. So, an investor may have different approaches in determining the value of
not be able to obtain returns exceeding the market the shares at the future. Fundamental analysis attempts
return without more risking. It means that the to predict stock prices in the future by: (1) estimating
difference between the price at a certain period and a the fundamental factors that affect stock prices in the
price in the other periods is random. The difference is future, and (2) applying the relationship of these
the stock return, which in a certain time period is zero. variables in order to obtain the estimated stock price.
This means that volatility will not have any significant The fundamental company is influenced by many
trend in the long enough period of time. things. Warren Buffet splits it into four basic
Elliott Wave Theory principles in analyzing companies, namely business
The Wave Principle was Ralph Nelson Elliott (1938) tenant (whether a business is easy to understand,
research about a mass social behavior or trend that whether the business has a consistent operating history
follows certain patterns. His research found that price and whether it has long-term prospects), management
changes in the stock market have a certain structure. tenant (whether rational management or management
Elliott noted that the pattern of price movements or style collide with the wishes of the shareholders),
waves is repetitive. Another thing to note is that financial tenants (focus on Return on Equity, has a
although these patterns are repetitive but it is higher profit margin than others, whether the company
unnecessarily to recur with time and the same wave adds to the prosperity of its shareholders) and market
height. In addition, he presented the pattern is part of a tenants (whether the value of the business, whether the
larger pattern, which in turn is part of a larger pattern business can be purchased for a significant discount to
again and so on (Pratikno, 2009). the intrinsic value of fundamental company) (Reilly
Elliott wave gives the impression that the volatility of and Brown, 2003).
the stock price can be different between one wave to Technical analysts use charts that show the usual
another. In addition, this theory also provides the historical data and some technical indicators such as
possibility that there is a trend of stock price return moving the average line to help finding the
volatility appears from these patterns. Trend is a intersection of the lines that will sign them to act.
general direction which happens in the market. This Often people say that technical analysis is art.
direction can move horizontally, up or down. The Inflation
Horizontal trend occurs when peak and through Various definitions of inflation in the economy have
successive horizontal lines. Uptrend occurs when a been proposed by the experts. But in general, inflation
series of peaks and through which is exceeding the is a symptom of rising prices on an ongoing basis
previous peak and through, while in the down is when (continuing) to a number of goods. The temporary
peak and through are lower than the previous peak and increase is not called inflation and price increases on
through (Murphy, 1999). the type of commodity is not also called inflation.
Stocks Gross Domestic Product
Stock is a sign of ownership in incorporated company GDP is defined as the total value of all goods and
which has been known that investors buy Stocks for services produced in the region within a specified
the purpose of obtaining income from these Stocks. period (usually a year). GDP differs from gross
Public investors are categorized as investors and national product by introducing factor income from
speculators. Investors here are the people who buy abroad who works for the country. Thus the GDP only
stocks to have a company in the hope of getting counts the total production of a country regardless of
dividends and capital gains for the long term, while whether the production is done by using a factor of
speculators are people who buy Stocks to be sold back production in the country or not, instead, paying
when the most favourable exchange rate situation is attention to the origin of the PNB production factors
considered. Stocks provide two kinds of income, being used. Nominal GDP Prefers to the value of GDP
namely dividends and capital gains. without regard to the effect of the price. While real
According to Hartono (2003), the stock price at stock GDP (GDP at constant prices) corrected nominal GDP
market in the appropriate time is determined by the figures by including the effect of the price.
market participants. The market value is determined Company Size
by the demand and supply of the relevant Stocks on According to Ferry and Jones, the size of the
the stock market. The stock price is the market price companies describes the size of a company
recorded every day at closing time (closing price) of a represented by total assets, number of sales, average
stock. The financial statements may present relevant total sales and average total assets (Sujianto, 2001). In

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this study, the size of the company is the size or Debt Ratio (DR), Price to Earnings Ratio (PER),
magnitude of sales obtained by the company. State Earning per Share (EPS), and Size have a significant
desired by the company is the net profit after tax influence on stock prices. While a partial analysis
because it is adding its capital. The operating profit showed that earnings per share (EPS) has a significant
can be obtained if the amount of the sale is greater influence on stock prices.
than the sum of variable costs and fixed costs. So that 2.3 BUILDING HYPOTHESIS
net income had a desired amount then the Relation between Inflation and Stock Price
management will conduct a thorough sales planning, Inflation is characterized by the increase in the price
as well as the right to control, in order to achieve the of the goods. The inflation rate effect on stock prices,
desired amount of sales. according to the results of research done by Efni
Leverage (2009) showed that the rate of inflation affect stock
Leverage is the use of assets and resources by prices. At the time of rising inflation marked goods
companies that have fixed costs (fixed load), the prices rise, the cost of production is higher than
source of funds from the loan has fixed the interest as company's revenue and profitability will decrease. The
an expense to increase the potential benefit of decline in stock prices affects the investor to think that
shareholders (Sjahrial, 2007). The leverage ratio they are less competitive.
shows how much a company uses external debt to From these arguments we construct the hypothesis
fund operations and expansion. Leverage is often that the inflation rate negatively affects the share
interpreted as a performance booster and a company price.
identical with debt. Debt can improve the company's Relation between Gross Domestic Product Growth
performance results than if you rely on the strength of and Stock Price
its own capital. Financial leverage ratio measured by GDP measures the value of goods and services
Debt Ratio, Debt to Equity Ratio (DER), Time Interest produced in the territory of a State regardless of the
Earned Ratio, Fixed Charge Coverage Ratio, and Debt nationality of a particular time. The research done by
Service Ratio (Sutrisno, 2003). Suryanto and Kesuma (2013) showed that GDP does
Profitability not affect the stock price, but GDP is a macro-
Profitability is the company's ability to generate economic factor that indicates the level of production
profits. Profit analysis is usually based on information of a country that could affect investors' expectations.
contained in the income statement. Benefit ratio So that the higher rate of GDP growth will be
calculations use data from the balance sheet. indicated on the high rate of growth of consumption of
Profitability ratio is the ratio that aims to determine the residents in the country, which will affect an
the company's ability to generate profits for a certain increase in the level of demand for goods to the
period and provide an overview of the effectiveness of company that provides the needs of the community.
management in carrying out its operations. The Increased demand will increase the amount of its
effectiveness can be seen from the profit generated on profit from the increase in the number of sales, which
sales and investment companies. Profitability ratios will increase the company's stock price, and vice
can be measured by Net Profit Margin, Return on versa. From these arguments we construct the
Assets, Return on Equity, and Basic Earning Power hypothesis that GDP rate positively affect the share
(Brigham and Houston, 2010). price.
2.2 PAST RESEARCH Relation between Size and Stock Price
Patriawan (2011) analyzed the influence of the The size of the company which is measured by total
independent variable EPS, ROE and DER to the stock sales will cause a greater amount of information about
price. EPS resulted in this study has significant the company available throughout the year so that the
positive effect on the stock price changes; ROE size of the companies will have an effect on stock
negatively affected the stock price changes, while prices. Viandita, et.al (2012) showed that the size
DER has no significant effect on stock price changes. significantly influence stock prices. With the
Rinati (2012) examined the effect of independent increasing large size of the company, then there is a
variables namely NPM, ROA, ROE on stock prices. tendency that more investors are paying attention to
The research shows that the NPM, ROA and ROE the company. This is because large companies tend to
have a significant effect on stock prices if tested have a more stable condition. The stability attracts
simultaneously, whereas only partially ROA has investors to own the shares of the company. That
significant effect on stock prices. Suryanto and condition was the responsible of the company to
Kesuma (2013) examined the effect of financial increase the stock price in the capital market.
performance, the rate of inflation and GDP to the Investors have great expectations for large companies.
stock price of food and beverage companies. PER and Expectations of investors are in the form of dividends
EPS significant positive effect but the ROE, the rate of from the company's acquisition. Increased demand
inflation, and GDP growth has no significant effect on may spur the company's shares on the stock price
stock prices. increases in the capital market. Such increase shows
Viandita, et.al. (2012) investigated the influence of that the company considered having a greater "value".
Debt Ratio (DR), Price to Earnings Ratio (PER), Due to the effect that the company had a great amount
Earning per Share (EPS), and Size on stock prices. of total sales with a huge advantage is considered

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competitive in the capital market. From these Data collection techniques used in this study is
arguments we construct the hypothesis that size documentation of annual report of property and real
positively affects the share price. estate companies from 2005 to 2013 which are listed
Relation between Leverage and Stock Price in the Indonesia Stock Exchange and inflation data as
Leverage as measured by debt-to-equity ratio, the ratio well as GDP growth from BPS(Central Bureau of
of corporate debt to the amount of capital. In general, Statistics) in the period of 2004-2013.
the greater the numbers are considered the more 3.2. MEASUREMENT OF VARIABLES
dangerous financially DER Company is. The greater Dependent Variable
the number of DER for a company then the Measurement of stock price is the closing share price
management must work harder to keep the company's (closing price) of each company obtained from the
cash flow. Deviand Badjra (2014) showed DER has share price at year-end period.
significantly negative effect on stock prices. The Independent Variables
higher the risk the higher profits are expected to Inflation Rate
provide. High Risk affects High Return. This the The inflation rate is a measure of economic activity
fundamental stock investors are counted as a that is used to describe the condition of the national
consideration when buying or selling stocks. With a economy (about an increase in the average price of
higher level of risk, investors will bid fundamentally goods and services produced by the economy system).
the lower price of its shares. Conversely, the lower the This variable was measured by recording the data rate
figure DER the higher a fundamental investor of inflation of annual national consumer price index
company will appreciate due to a lower level of risk. published by BPS.
Investors would be more willing to buy shares at Gross Domestic Product Growth
higher prices to record all same conditions. From Economic growth is generally defined as an increase
these arguments we construct the hypothesis that the in real GDP per capita. GDP (Gross Domestic
leverage negatively affects the share price. Product) is the market value of the total output of a
Relation between Profitability and Stock Price country, which is the market value of all final goods
Profitability as measured by return on assets (ROA) and services produced over a given period by the
reflects the company's ability to generate profits after factors of production located within a country.
tax by using existing and total assets (the cost of GDP growth = GDP - GDP the previous year
which is used to fund assets) which are excluded from GDP of the previous year
the analysis. Return on Assets (ROA) positively Size
indicates that of the total assets used for the operation Company’s size describes the size of a company
of the company is able to provide profits for the represented by total assets, number of sales, average
company, and investors will be interested in the shares total sales and average total assets (Sujianto, 2001).
so that the share price will rise, and vice versa. If the Thus, the size of the company is the size or magnitude
announcement contains a positive value, it is expected of total sales which is owned by the company. In this
that the market will react when the announcement is study, the size of the company expressed total assets
received by the market. At the time the information and total sales in the property and real estate company
was announced and all market participants have which has been listed on the Stock Exchange. Size =Σ
received such information, market participants must Revenue.
first interpret and analyze that information as good Leverage
signals (good news) or poor signal (bad news). If the Financial leverage can be defined as the extent to
announcement of such information is considered as a which funding strategy through the use of debt to
good signal for investors, then there is a change in the invest in increasing production, and generate
volume of stock trading. From these arguments we profitability which is unable to cover interest and
construct the hypothesis that size positively affects the income taxes (Harmono, 2009). The ratio used in this
share price. study is the Debt to Equity Ratio (DER). This ratio is
the ratio between the company's debts to the amount
3. RESEARCH METHOD of capital. In general, the greater the numbers
3.1 SAMPLE, DATA AND COLLECTION achieved, the more dangerous DER Company
PROCEDURES financially is. Thus it does not mean if DER has larger
The sampling technique used in this research is the numbers it will hurt the company. During cash flow
purposive sampling method. 10 out of 44 companies companies may cover expenses and could generate
are taken as the samples of this research. The criteria greater corporate profits meaning that DER large
used in determining the sample includes: a) property numbers do not matter.
company and real estate in Indonesia, which consist The greater the number of DER in a company, then
properties and real estate companies listed in the Stock the harder the management must work to keep the
Exchange in the period of 2005-2013. b) Property and company's cash flow. The higher the risk, the higher
real estate companies that operate continuously during the profits are expected, High Risk affects High
the study period. c) Property and real estate companies Return. This is the basis of stock investors counted as
that publish the complete financial reports during the a consideration when buying or selling stocks. With a
study period, which was in the period of 2005-2013. higher level of risk, investors will bid fundamentally

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the lower price of its shares. Conversely, the lower the d) Multicolliniearity. Multicolliniearity test value
figure of DER a fundamental investor company will shows tolerance value of each independent variable is
appreciate higher due to a lower level of risk. greater than 0.1 and VIF value smaller than 10.
Investors would be more willing to buy shares at From the whole classical assumption, we can conclude
higher prices to record all same conditions. that our secondary data is good and we can do further
Companies that can grow without long-term debt can testing.
be considered as a healthy company because it can 4.2 HYPOTHESIS TESTING
grow with operational activities. The Test results of Variable Inflation on Stock
DER = Total Debt x 100% Price
Total Equity Based on the results, it is obtained the t number for
Profitability variable inflation rate of 1.487 with a significance
Profitability is the company's ability to generate level of 0.141 which indicates that the inflation rate
profits. The ratio used in this study is Return on does not significantly influence the stock price of the
Assets (ROA). This ratio is used to measure the ability property and real estate industries listed on the
of management to gain (profit) as a whole. The greater Indonesia Stock Exchange so that the alternative
the ROA, the greater the level of profit achieved by hypothesis proposed in this study was rejected.
the company and the better the company's position in These results are similar to studies conducted by
terms of the use of assets. Suryanto and Kesuma (2013) in his research obtained
ROA is the ratio used to measure a company's ability results indicating that the inflation rate has no
to produce a net profit after tax on total assets significant effect on stock prices. Rising inflation will
(Brigham and Houston, 2010). In other words, the cause the cost of the company increased, these costs
higher this ratio, the better the productivity of assets in will then automatically make the company rise selling
getting net income. This in turn will increase the prices to maintain profits and if it constantly occurs in
attractiveness of the company to investors. Thus, it is the short and long term it will increase the probability
needed to increase the attractiveness of the company of buyers to switch to competitors and this
to make the company more attractive to investors, information will be soon circulated widely and affect
because the rate of return or dividend will be even the perception of investors that the company's current
greater. It will also have an impact on stock prices of performance and its prospects are less well so that it
these companies in the capital market which will will respond to the release of shares held and there
increase so that the ROA will affect the company's was a negative correction in stock prices. However, it
stock price. ROA can help companies that have run is not done by all investors, investors who see long-
well the accounting practices to be able to measure the term gains and Investors who see business prospects
overall efficiency of capital use, which is sensitive to for property and real estate sectors, will either buy
any matter affecting the company's financial condition stocks whose prices have dropped and the share price
so that we can know the position of the company will perform positive corrections, so that inflation
against the industry. does not significantly influence the stock price in this
ROA = Net profit x 100% sector.
Total Assets The Test Results of Variable GDP Growth on
3.3 Analysis Tools Stock Price
The analysis used to assess the influence of Based on the results it is obtained that t number for the
inflation rate, GDP, size, leverage, and profitability to variable GDP growth is 1.428 with a significance
stock price is multiple regression. level of 0.157, this means that GDP growth variables
Y = a-b1X1 + b2X2 + b3X3-b4X4+ b5X5+ e do not significantly influence the stock prices on the
real estate property industry and listed on Indonesia
4. RESULTS AND DISCUSSION Stock Exchange so that the alternative hypothesis
4.1. ASSUMPTIONS OF CLASSICAL TEST proposed in this study was rejected.
a) Normality. Kolmogorov Smirnov Test results These results are similar to studies conducted by
obtained asymptotic significance value 0.540. This Suryanto and Kesuma (2013) in his research obtained
value is greater than the value α (0.50), which means results which indicated that GDP growth does not
there is no problem of normality in data used in this significantly influence stock prices.
study. Residual data is normal, so that the data used GDP growth was not influential on stock prices and
are in normal distribution. the real estate property sector indicates that the
b) Auto-correlation. Auto-correlation test used on increase and decrease of Indonesia's gross domestic
Durbin Watson Test results 2.010 which is between du product is less influential for the investors to invest in
and 4-du. This result shows that there is no problem of the shares of the company. Increased GDP is a good
auto-correlation in the model. signal (positive) for investment and vice versa. GDP
c) Homo scedasticicity. The test used is Glejser Test. increase has a positive influence on consumers'
The results show that significance value of each purchasing power; thereby it is needed to increase the
independent variables are greater than 0.05, so that we demand for the company's products. There is an
can conclude that there is no problems increasing demand for the company's products which
heteroscedaticity. Inconsistent data. will later increase company profit and can ultimately

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increase the company's share price. But in this case, dangerous company’s financial. The greater the
Indonesia's per capita GDP has been increasing since number of DER in a company then the harder the
2000s until present. Originally, the World Bank management must work to keep the company's cash
estimates that Indonesia will reach approximately flow. The more risk, the higher profits are also
USD $ 3,000 in 2020 but Indonesia managed to reach expected. High Risk affects High Return. With a
the figure of a decade earlier. Achievement of USD $ higher level of risk, investors will bid the lower
3000 level is considered as an important step because fundamental stock price, and vice versa. Like a
the impact is the acceleration of development in booster tool, on the one hand, the debt can make a
various sectors (such as retail, automotive, and company's growth to be faster when compared to only
property) because of the increase in consumer demand relying on their own capital, if too large value of debt
so that it becomes a catalyst for economic growth. The can make a company's financial condition becomes
Indonesian government set a target to achieve a level unhealthy. DER in some companies that have more
of USD $ 5000 in 2015, so investors will be optimistic than one, it disturbs the growth of his company's
about stock investments in the property sector and real performance which also disturb the growth of the
estate which thus causing stock prices to be stable, share price, and because it is mostly the investors who
although the rate of growth of GDP fell. avoid companies that have more than DER amounted
The Test Results of Variable Size on Stock Price to 2. Therefore, some investors may not pay much
Based on the results, it is obtained t number for the attention to the increase in the numbers of DER if it
variable size of 2.845 with 0.006 significance level does not exceed the number 2. So that leverage levels
which indicates that it is below 0.05, this means that has no significant effect on the price of property and
the variable size has a positive effect on the stock real estate companies.
price on the property and real estate industries listed The test Results of Variable Profitability on Stock
on the Indonesia Stock Exchange so that the Price
alternative hypothesis proposed in this study is Based on the results, it is obtained t number for the
accepted. These results are similar to studies variable profitability as measured by ROA 2.854 with
conducted by Vianditaet, et.al. (2012) in his research 0.005 significance level that indicates it is below 0.05,
obtained the results which indicate that size have a this means that the variable profitability significantly
significant effect on stock prices. influence the stock prices on the real estate property
In the financial aspects, the sale can be seen from the industry as listed on the Indonesia Stock Exchange so
planning and the realization that measured in dollars. the alternative hypothesis proposed in this study is
Companies that are in the high sales growth require accepted.
the support of the organization's resources (capital) is These results are similar to studies conducted by
greater, and conversely, the company’s sales growth Rinati (2012) in his research obtained the results
rate of the low demand for the organization's indicating that profitability as measured by ROA has
resources (capital) is also getting smaller. Companies significant effect on stock prices.
with larger size have greater access to sources of Return on Assets (ROA) is positive which indicates
funding received from various sources; so as to obtain that of the total assets used for the operation of the
funds from investors it will be easier for companies company is able to provide profits for the company, it
with large size to have a greater probability to win the shows the efficiency and effectiveness of management
competition or to survive in the industry. The to manage the assets so it can obtain large profits, and
operating profit can be obtained if the amount of the investors will be interested in the shares so that the
sale is greater than the sum of variable costs and fixed share price will be rise, and vice versa.
costs. So that net income had a desired amount then
the management will conduct a thorough sales 5. CONCLUSION AND RECOMMENDATION
planning, as well as the right to control, in order to Conclusions
achieve the desired amount of sales. So, the greater a) The inflation rate does not significantly affect the
sales gained the more the stock price. company's stock price.
The Test Results of Variable Leverage on Stock b) GDP growth does not significantly affect the
Price company's stock price.
Based on the results, it is obtained t number for the
variable leverage as measured by DER amounted to
c) The size of the company has positive and
significant influnce on the company's stock price.
1.276 with a significance level of 0.206, this means
that leverage variable has no significant effect on the d) Leverage does not significantly affect the
stock price on the property and real estate industries company's stock price.
listed on the Indonesia Stock Exchange so that the e) Profitability has positive and significant influence
alternative hypothesis proposed in this study is on the company's stock price.
rejected. These results are similar to studies conducted Research Implications
by Patriawan (2011) in which his research obtained a) The Company's Property and Real Estate Sector
the results showing that leverage as measured by DER Companies should consider the independent
has no significant effect on stock prices. In general, variables that significantly influence the stock
the greater DER number is considered more price; the company size and profitability as a

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material planning consideration in the future [7]. Rinati, Ina. 2012. Pengaruh Net Profit Margin,
financial performance. Return On assets, dan Return On Equity
b) Subsequent research terhadap Harga saham pada Perusahaan yang
1. Adding the number of samples so as to Tercantum dalam Indeks LQ45.Skripsi, Fakultas
increase the predictive power of the study. Ekonomi, Universitas Gunadarma, Depok.
[8]. Reilly, Frank K. dan Keith C. Brown. 2003.
2. Future studies may add independent variables Investment Analysis and Portofolio Management,
associated with stock prices as reserves,
Seventh Edition. United States of America: South
dividend policy, the ratio of the market and
Western A Division of Thomson Learning Ohio.
others.
[9]. Sjahrial, Dermawan. 2007. Manajemen
3. Future studies need to consider the use of other Keuangan. Jakarta: MitraWacana Media.
media report that is used to determine the stock [10]. Sujianto. 2001. Dasar – Dasar Manajemen
price. Keuangan. Yogyakarta: BPFE.
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