Analysis of Factors Affecting Yield to Maturity of Corporate Bonds Traded on Indonesia Stock Exchange 2016 - 2018

Abstract

This study analyzes the influence of the variable Debt Equity Ratio (DER), Maturity, Firm Size and Bond Rating on the Yield To Maturity (YTM) of corporate bonds. The study population consists of corporate bonds traded on the Indonesia Stock Exchange period 2016-2018. The sample selection technique by purposive sampling. The research sample 43 corporate bonds issued by 18 companies from all sectors except the banking and financial sectors. The research analysis method used is descriptive statistics and Common Effect Model (CEM) panel data regression. The results showed that partially the DER variable had no effect on YTM, maturity had a significant positive effect on YTM, Firm Size and Bond Rating significant negative effect on YTM. The implication of this research is that companies need to improve their bond ratings to maintain investor confidence. In addition, is easier for companies with large assets to find external sources of funds through the issuance of bonds. This is because both are proven to have a negative effect on YTM. For further research, is expected to study other variables that affect YTM because the coefficient of determination in this study is 59%, and 41% is influenced by other variables not explained in this study.