The Effect of Return on Equity and Dividend Payout Ratio On Price Earnings Ratio in Food and Beverage Sub-Sector Companies Listed On The Indonesian Stock Exchange In 2017-2022

Abstract

Purpose – This study aims to determine the effects of Return On Equity and Dividend Payout Ratio on Price Earning Ratio.

Design/methodology/approach – This research uses quantitative data. The sample consists of 15 food and beverage sub-sector companies listed on the Indonesian Stock Exchange during the 2017–2022 period. The hypothesis is tested using multiple regression analysis with EViews 9 software.

Findings – The results indicate that the Return on Equity variable has a positive and statistically significant effect on the Price Earning Ratio. Similarly, the Dividend Payout Ratio has a positive and statistically significant effect on the Price Earning Ratio.

Research limitations/implications – This study focuses on Price Earning Ratio and its relationship with Return on Equity and Dividend Payout Ratio in the context of food and beverage sub-sector companies. It is limited to a specific time frame (2017–2022) and a sample size of 15 companies.