THE DETERMINANTS OF STOCK PRICES: A STUDY OF FINANCIAL LISTED FIRMS IN INDONESIA CAPITAL MARKET

Abstract

Knowledge about the determinants of stock prices is quite instrumental in assist investor’s
investmentdecisionsmaking.Thepurposeofthisstudyistoidentifythedeterminantsofshare prices in the
financial listed firms at Indonesia Capital Market and show factors that investors rely on to take their
investment decisions. This study using secondary data gathered from the official website of
Indonesia Capital Market with the sample is 15 financial firms selected by using a purposive
sampling technique for the period of 2009 – 2018. A panel data analysis method was used to
investigate the determinants of stock prices in financial listed firms. The empirical research result
shows that leverage has a negative effect on firm share prices, profitability and firm size have a
positive effect on stock prices. Meanwhile, institutional ownership and dividend policy does not
affect firm stockprices.