ANALYSIS THE EFFECT OF GROWTH OPPORTUNITY, LIQUIDITY, LEVERAGE, AND VOLATILITY OF CASH FLOWS TO HEDGING DECISIONS

Abstract

Companies operating internationally will surely experience the risk of foreign currency fluctuations. The use of foreign exchange raises an exchange risk profile that must be addressed. One way to overcome the exchange rate risk is to use currency derivatives as hedging tools. research This is a conceptual paper that aims to determine the effect of growth opportunity, liquidity, leverage, and cash flow volatility on hedging decisions. This study uses secondary data in the form of annual financial statements of manufacturing sector companies listed on the Indonesia Stock Exchange (IDX) from 2015 to 2018. Updates in this study are samples and research years and the addition of control variables to control the relationship between the dependent and independent variables.