Analysis of Investment Opportunity Set (IOS) Relation with Growth Realization

ANALISIS HUBUNGAN INVESTMENT OPPORTUNITY SET (IOS) DENGAN REALISASI PERTUMBUHAN SERTA PERBEDAAN PERUSAHAAN YANG TUMBUH DAN TIDAK TUMBUH TERHADAP KEBIJAKAN PENDANAAN DAN DIVIDEN DI BURSA EFEK JAKARTA

Analysis of Investment Opportunity Set (IOS) Relation with Growth Realization and the Difference of Growing and Ungrowing Companies on Fund Policy and Dividend Policy in Jakarta Stock Exchange

Oleh : Isnaeni Rokhayati

Abstract
The aim of this research was to find out the correlation of IOS set value as the proxy of company’s growth to company’s growth realization and to test the difference between fund policy and dividend policy between company classified as growing campanies and ungrowing companies. There are seven (7) IOS variables used as the indicators of company’s growth, i.e.: Market to book value of asset (MVABVA), Market to book value of equity (MVEBVE), Price to earning ratio (PER), Capital expenditure to book value of asset (CAPBVA), Capital expenditure to market value of asset (CAPMVA), Firm to book value of property, plant and equipment (VPPE), and Current asset to net sales (CAONS). Those seven variables were correlation by Spearman Rank method to average company’s growth after IOS value was calculated. The company’s growth was proxied with sales, profit, equity and asset growth. In order to determine the company’s classification, several analysis were used. Based on the result of factor analysis, 23 growing companies and 13 ungrowing companies were determined from BEJ public company that met the requirement. From the research result, it can be found that all IOS variables have different correlation to all components of company’s growth realization. The significant positive correlation for growing companies was occurred in MVEBVE to sales by 0.389 and to equity growth by 0.708. MVABVA ratio to equity growth was 0.667. CAPBVA ratio to
assets growth by 0.377. VPPE to sales growth was 0.364 and to equity growth was 0.632. For ungrowing companies the significant positive correlation was occurred in CAPBVA to profit growth by 0.505 and CAPMVA ratio to assets by 0.538. Significant negative correlation for growing companies was occurred in CAPMVA to equity growth by –0.483. For ungrowinng companies the significant negative correlation was occurred in PER to profit growth by –0.479. CAONS ratio to sales growth was –0.484 and to equity growth was –0.533. From the testing of fund policy, it can be fund that market debt to
equity ratio has insignificant correlation by 0.779 but book debt to equity ratio has a significant correlation direction by 0.027. From the testing of dividend policy it can be found that dividend payout ratio has insignificant correlation in amount of 0.332, beside dividend yields ratio has significant correlation in amount of 0.000 to company dividend policy.


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