Do Investors React To Dividend Yield And Price Earning Ratio? An Empirical Evidence From Indonesia Stock Exchange

<div>The asymmetric information between insiders and investors are more likely to occur</div><div>(Nurazi, Kananiua, & Usman, 2015; Usman & Tandelilin, 2014; Utrero-González & J.</div><div>Callado-Muñoz, 2016; Wang & Wang, 2017; Yusra, 2014). Investors’ awareness of</div><div>information has implication to the stock price movements in the capital market. This</div><div>study aims to examine the effect of dividend yield (DY) and price earning ratio (PER) to</div><div>investors’ reaction. We performed return (RTN) as the surrogated proxy in attenuating</div><div>investors react in Indonesia Stock Exchange. By utilizing 35 observation data from 7</div><div>manufacture company from 2011 to 2015 period. The result show that dividend yield</div><div>(DY) there is no significant contribution (ρ>0,05) towards return (RTN). On the other</div><div>hand, we found that price earning ratio (PER) there is significant contribution (ρ<0,05)</div><div>towards return (RTN).