The Role of Market Reaction Analysis in View of Company Size, Average Revenue, and Profitability

Abstract

This research aims to determine the effect of company size and income smoothing on stock market reactions. The capital market is a place where investors as fund owners meet with issuers as companies seeking funds. In making a decision to invest, an investor needs a financial report to find out information and to use it as consideration if the investor wants to invest. The test results for the income smoothing variable show that the regression coefficient is positive at 2.805. The t statistical test for the Income Smoothing variable obtained a calculated t value of 2.805 which was greater than the t table value of 1.668. The significance value obtained was 0.007, which was smaller than the predetermined significance value, namely 0.05. This shows that income smoothing has an effect on the market reaction of the company. The test results above show that ROA with earnings response has a positive regression direction, so that an increase in ROA causes an increase in Company Value. The results of the t test show that the Roa variable has a t value > t table (3.804> 1.668) and a significance value < 0.05, namely the significance level obtained (0.000 < 0.05).