Analyzing Sustainable Growth Rate of the Firms in Kehati Sustainable and Responsible Investment Index in Indonesia

The objectives of the research are to analyze the sustainable growth rate of the firms, to examine to what extent it is affected by stock price, return on equity, and dividend payout ratio, and to what extent stock price and dividend payout ratio influenced by return on equity. Data have been collected from the Indonesia Stock Exchange (IDX) within a period of 2010 to 2013. Research population is Kehati Sustainable and Responsible Investment Index, which comprises 25 companies from various industrial sectors. We have considered using 15 companies from the index as our sample. From the results of regression analysis we concluded that stock price has positive significant regression coefficient on sustainable growth rate, dividend payout ratio has negative significant regression coefficient on sustainable growth rate, return on equity has positive significant regression coefficient on dividend payout ratio and stock price. Finally, return on equity has positive regression coefficient on sustainable growth rate, however, the result is not significant