Examining Leverage and Sales Growth: Their Influence on Stock Prices of Agricultural Firms on the Indonesia Stock Exchange

Abstract

Information available in the capital market influences investor confidence, which in turn impacts market efficiency. Stock prices are a crucial factor for every investor to consider when investing in shares. Higher stock prices indicate better performance of the issuing company, and vice versa. This study aims to determine the effect of leverage and sales growth on stock prices of agricultural companies listed on the Indonesia Stock Exchange from 2018 to 2022. The research sample consists of 18 agricultural companies selected through purposive sampling. Data were analyzed using EViews 12 SV software. The study's findings reveal that leverage has a negative impact on stock prices. High leverage indicates a heavy reliance on debt, which increases the risk of bankruptcy and high interest burdens, thus reducing the attractiveness of the company's shares to investors. Meanwhile, sales growth does not have a significant impact on stock prices, as the probability value is above 0.05.