THE ROLE OF INVESTMENT OPPORTUNITY SETS (IOS) IN THE RELATION BETWEEN CAPITAL EXPENDITURES AND UNCERTAINTY OF FUTURE EARNINGS

Agustiani, Vini (2015) THE ROLE OF INVESTMENT OPPORTUNITY SETS (IOS) IN THE RELATION BETWEEN CAPITAL EXPENDITURES AND UNCERTAINTY OF FUTURE EARNINGS. S1 thesis, UAJY.

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Abstract

This study emphasizes on examining the moderating effect of Investment Opportunity Sets (IOS) in the relation between Capital Expenditures and Uncertainty of Future Earnings. I estimated that the IOS can mitigate the positive effect of capital expenditures to Uncertainty of future earnings. Since, the greater the IOS, the firm will have more option in valuable investments which have more certain return. Thus, by executing those valuable investments, firm can reduce its future earnings uncertainty that is caused by the capital investment. This study also can reveal the investment behavior of Indonesian firms, especially the manufacturing firms. By using 299 samples which are taken from 80 listed manufacturing firms from 2006- 2009, it found that the capital expenditures have positive effect towards the uncertainty of future earnings. Moreover, the IOS is proven to be able to mitigate that positive effect and make the effect become negative. Therefore, the manufacturing firms in Indonesia are proven to be able to execute the valuable opportunity and invest in the prospective investment

Item Type: Thesis (S1)
Uncontrolled Keywords: capital expenditures; capital investments; Investment Opportunity Sets; uncertainty of future earnings.
Subjects: Business Management > International Financial Management
Divisions: Fakultas Ekonomi > Manajemen Internasional
Depositing User: Editor UAJY
Date Deposited: 12 Aug 2015 12:37
Last Modified: 12 Aug 2015 12:37
URI: http://e-journal.uajy.ac.id/id/eprint/7775

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