THE INFLUENCE OF LIQUIDITY AND PROFITABILITY TOWARD SHARE PRICE: MEDIATED EFFECT OF HEDGING (EVIDENCES FROM SHARES OF LQ-45 LISTED IN INDONESIAN STOCK EXCHANGE FOR PERIOD OF 2011 TO 2015)

Main Article Content

Tigor Sitorus
Ratlan Pardede
Ardi

Keywords

Hedging, liquidity, profitability, share price, LQ-45, Stock Exchange

Abstract

Purpose: This study aims at investigating and testing the mediated effect of Hedging on the effect of profitability and liquidity toward share price at shares of LQ-45, listed in Indonesian Stock Exchange from2011 to 2015. The current research was conducted because the phenomenon and the fluctuations in price of shares were unavoidable.


Methodology: The Structural Equation Modelling (SEM) by Amos was used to analyze the 110 observations of data.


Main Findings: The result of analysis shows that; (1) the liquidity gives not significantly negative influence to share price, (2) the liquidity gives  significantly negative influence to hedging, (3) the profitability gives significantly positive influence to share price, (4) the profitability gives significantly negative influence to hedging, (5). Hedging gives significantly positive influence to share price.


Implications/Applications: The present study provides new evidence that the mediated effect of Hedging on the influence of liquidity and profitability toward share price has more strength compared to the direct influence of liquidity but not for profitability.

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