ANALYSIS THE INFLUENCE OF INVESTMENT OPPORTUNITY SET (IOS) TOWARS FIRM’S SHARE RETURN OF NON FINANCIAL COMPANIES LISTED IN INDONESIA STOCK EXCHANGE (2011-2013)

Abstract

The growth of company will create a lot of investment options that guide company for the future investment. This investment option then often known as Invesment Opportunity Set (IOS). The funding sources are not only coming from the company yet investors. Investors will certainly expect high return from its investment. The objective of this research is to examine the influence of Investment Opportunity Set (IOS) towards firm’s share return of non financial companies listed in Indonesia Stock Exchange (2011-2013). Proxy variables of IOS that used in this research are market to book value of asset ratio (MKTBA), market to book value of equity ratio (MKTBE), earning per share/price ratio (E/P) and capital expenditure to book value of asset ratio (CAPBVA). This research used purposive sampling method and was conducted over 3 years observation (2011-2013) using 85 samples of non financial companies. The research model used for this research is regression linear analysis method. The test was conducted by using SPSS 20.0 software. The regression test result showed that the proxy variable of IOS which is MKTBA has positive and significant influence toward firm’s share return of non-financial companies, MKTBE as the proxy variable of IOS has no positive influence but has significant influence towards firm’s share return of non financial companies, and E/P and CAPBVA as the proxy variable of IOS has positive but has no significant influence towards firm’s share return of non financial companies. From the observation result can be concluded that all proxy variables of IOS (independent variable) has simultaneously influence towards firm’s share return (dependent variable) of non financial companies. However, not all proxy variables of IOS has partially influence towards firm’s share return of non financial companies.