The Effect of Return on Equity and Earning Per Share on Stock Prices Period 2011 – 2017 (Case Study: Adaro Energy, Tbk.)

The purpose of this study is to know the Return On Equity (ROE), Earning Per Share (EPS) and the Share Price of PT. Adaro Energy, Tbk. and to determine the effect of Return On Equity (ROE), Earning Per Share (EPS) both partially and simultaneously on the stock price of PT. Adaro Energy, Tbk. 2011 – 2017 period. This study uses secondary data, namely data taken indirectly from the source. The research method uses a quantitative descriptive approach and tests the classical assumptions which include, normality test, multicollinearity test, autocorrelation test, heteroscedasticity test, and data analysis including simple linear regression, multiple linear regression, test coefficient of determination, and hypothesis test (t and F) . The partial test results (t test) for the ROE variable on stock prices obtained thitung = 2.522 <2.570 with a significant 0.053> 0.05 which means that Ho is accepted and H1 is rejected where ROE does not have a significant effect on stock prices, while for EPS variables on stock prices obtained thitung 4.316> 2.570 with a significance of 0.008 <0.05, which means that Ho is rejected and H2 is accepted where EPS has a significant influence on the Stock Price. Simultaneous tests (Test F) obtained Fcount 9,430> 6,94 with a significance number of 0,031 <0,05, which means that Ho is rejected and H3 is accepted where there is a significant effect between ROE and EPS simultaneously on Stock Prices. The Coefficient of Determination (KD) is indicated by the number 0.825 which concludes that ROE and EPS contribute 82.5% to the Stock Price, while the remaining 17.5% is influenced by other variables not examined.


Background
An increasingly competitive business world requires companies to be able to adapt to avoid bankruptcy and excel in competition. To anticipate such competition, the company must maintain and improve its performance as an effort to maintain the continuity of its business. The usual effort is to implement a variety of strategic policies that produce efficiency and effectiveness for the company. These businesses require a lot of capital, including efforts to obtain and allocate these funds optimally. One place to obtain these funds is through the capital market.
Capital markets provide great opportunities, both for companies going public and for investors to portfolio their funds in the capital market. One of the advantages of the capital market is its ability to provide capital in the long run. To finance investments in long-term projects, it is appropriate for entrepreneurs to use funds from the capital market.
One important factor for investors in supporting the continuity of an industry is the availability of funds. Parties with excess funds will generally invest their funds at the level of returns according to the risks that must be borne by the investor. For investors, the rate of return (return) will be a very important factor because returns are the results obtained from an investment.
One of the most popular securities in the capital market is stocks. Shares are letters of proof of ownership of individuals or institutions within the company and are proof of taking part or participants in a public company (PT). Stocks are considered good if they are able to provide a realization return that is not too far from the expected return. According to Rusdin (2008: 66) The stock price is the price of a stock formed from the transactions that occur in the stock market that are determined by market participants with demand and supply of shares influenced by several factors. Stock prices show the performance of issuers moving in line with the performance of issuers. If the issuer's achievements are getting better, then the profits that can be generated from business operations are getting bigger. Such shares of the company are in demand by many investors and the share price of the issuers in question tends to rise, which indirectly reflects good quality companies.
According to Fahmi (2012: 99) Return On Equity (ROE) is a ratio that assesses the extent to which a company uses the resources it has to be able to provide a return on securities and is calculated by dividing profit after tax with its own capital. The greater the Return On Equity (ROE) of a company, will increase the company's stock price. A high ROE level indicates that the company is able to obtain a high level of profit compared to the level of equity, in other words, the ability of management to utilize the share capital owned for its operations so that it will generate additional profits for the company. ROE is very attractive to shareholders and prospective shareholders.
The higher the ROE, the higher the value of the company, this is certainly an attraction for investors to invest in the company.
Sometimes the owner also wants data about the profits obtained for each share. The advantage of a sheet of stock is usually a profit indicator that is considered by investors which is the basic number needed to determine the stock price. Earning per Share (EPS) is a form of giving profits given to shareholders of each share they have (Fahmi). 2012: 97). Earning per Share is usually a concern for shareholders and management, the higher the EPS of a company means the greater the earnings that investors will receive from the investment, so for the company the increase in EPS has a positive impact on the price of its shares in the market.
The following is presented the Retrun On Equity, Earning Per Share and Share Prices of PT. Adaro Energy, Tbk. the period 2011 -2017 as follows: From the brief description above, the author feels interested in raising the theme as the material for writing a thesis. For this reason, the author intends to write it in a thesis with the title "The Effect of Return on Equity (

Limitation of Problems
Given the breadth of the scope of this study, the authors limit the scope of the problem, namely: "Effect of Return on Equity (ROE) and Earning per Share (EPS) on the Share Price of PT. Adaro Energy, Tbk. period 2011 -2017 ".
This research was conducted at PT. Adaro Energy, Tbk. having his address at Jalan H.R Rasuna Said, Blok X-5, Kav. 1-2 Jakarta -12950. By identifying financial statements for 2011 -2017. This research will be conducted for 5 months from October 2018 to February 2019.

Picture 1
Normal Probability Plot Source: SPSS 20 Processed Data From the normal probability plot results above it can be seen that the plot points (data) spread around the diagonal line and follow the direction of the diagonal line, this indicates that the data used as material for this study has data that is normally distributed. From the results of the multicollinearity test above obtained the Tolerance value of all variables> 0.10 and the VIF value of all variables <10, it can be concluded that there are no symptoms of multicollinearity in the regression model or in other words the data meet the classic assumption of multicollinearity.

Heteroscedasticity test
Source: SPSS 20 Processed Data In the picture above it can be seen that the points spread randomly, do not form certain patterns and do not overlap. This identifies that there is no heteroscedasticity or that the data meets the classical assumption of heteroscedasticity. In SPSS output in the Model Summary table, the correlation coefficient value is 0.908, which means the level of relationship between variables Return on Equity (X1), Earning Per Share (X2) and stock price (Y), including at a very strong level of relationship. shows that the Fcount value is 9,430 with a significant value of 0,031 while Ftable is 6,94 with the df numerator = 2, df the denominator = 4 and significant level α = 0,05 so Fcount> Ftabel. Thus, Ho is rejected and H3 is accepted. This means that there is a significant effect between Return On Equity (ROE) and Earning Per Share (EPS) simultaneously or jointly to the stock price. From table 4.14 it can be seen that a significant level of 0.031 is smaller than the specified level α = 0.05 identifying that there is a significant simultaneous influence between Return On Equity (X1) and Earning Per Share (X2) on the Stock Price (Y).  Vol.10, No.10, 2019 128 become benchmarks of company performance, so that it can be seen the company's ability to produce a good level of profit so that it will increase stock purchase demand and stock prices will rise.

For Investors
Expected to pay attention to the ratios related to the increase in stock prices, and analyze how much influence both simultaneously and partially so that investors and prospective investors can choose the right decision for their investment.

For Further Researchers
It is expected to conduct research with more samples and variables, so that the results of the study have a broader and more accurate scope so that the company can see the factors that can influence stock prices.