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Financial performance of telecommunications companies and their stock price movements in the Indonesian stock market

Listed author(s):
  • Diena Aziza
  • Eno L. Inanga
Registered author(s):

    This study examines, critically, the relationship between movements in stock prices of a sample of Indonesian telecommunications companies listed on the Indonesians Stock Exchange and the nature of their relationship, if any, to company financial performance. It analyses 23 financial reports over the period 2005 to 2009, the first five financial years of each of the study companies in the sample. The study uses four independent variables to analyse the financial performance of each company, namely: earnings per share (EPS), return on assets (ROA), and return on equity (ROE), and debt to equity ratio (DER). Stock price was used as the dependent variable. The study disclosed simultaneous significant relationships between all the independent variables and the stock price movements. The multiple correlation coefficient (R) was 0.943, indicating a strong relationship among the variables. However, for individual independent variables, only EPS ratios had significant relationship with the stock price movements.

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    Article provided by Inderscience Enterprises Ltd in its journal Int. J. of Economics and Accounting.

    Volume (Year): 2 (2011)
    Issue (Month): 3 ()
    Pages: 255-281

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    Handle: RePEc:ids:ijecac:v:2:y:2011:i:3:p:255-281
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