The Influence of Debt to Equity Ratio and Earnings per Share on Share Price in Food and Beverage Sub-Sector Companies Listed on the Indonesia Stock Exchange (IDX) Year 2014-2020

Abstract

This study aims to analyze the effect of the debt-to-equity ratio (DER) on stock prices (SP) and the effect of the debt-to-equity ratio on stock prices through earnings per share (EPS). We examined companies in the consumer goods industry sector and the food and beverage sub-sectors that were listed on the Indonesia Stock Exchange for 2014–2020. The sampling method used in this study was non-probability sampling with a purposive sampling method in order to obtain 10 companies from 18 registered companies to be used as research samples. The data analysis method used in this research is panel data regression, which includes descriptive analysis, the classic assumption test, the coefficient of determination test, simultaneous testing (F-testing), and partial testing (t-testing) using Eviews 9.0 software. The results of the study show that: 1) debt-to-equity ratio has a significant effect on earnings per share; 2) debt-to-equity ratio has an effect on stock prices; 3) earnings per share has an effect on stock prices; and 4) earnings per share is able to mediate the effect of debt-to-equity ratio on stock prices.