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IJSTR >> Volume 9 - Issue 4, April 2020 Edition



International Journal of Scientific & Technology Research  
International Journal of Scientific & Technology Research

Website: http://www.ijstr.org

ISSN 2277-8616



Determinants Of Corporate Bond Yield In Indonesia: A Research Proposal

[Full Text]

 

AUTHOR(S)

Tirsam Sangi, Ignatius Roni Setyawan

 

KEYWORDS

Corporate Bond Yields, DER, CR, Interest Coverage, Interest Rate, Inflation, Ratings and Maturity

 

ABSTRACT

In the category of financial instruments, corporate bonds have the most central position. This is because bonds are financial instruments that are most directly affected by economic variables. In an Initial Public Offering (IPO), the criteria for listing candidates for bonds are tighter than stocks. In addition, corporate bond players are also more selected than stock and derivative players, which must have very large capital in order to get corporate bond returns that can exceed stock returns. This study aims to explore the determinants of corporate bond yield related. Unlike government bonds, this corporate bond has one important factor, which is the ranking of bonds issued by PEFINDO. In addition to bond ratings, there are several other determinants derived from namely financial ratios (DER, CR and interest coverage), economic variables (interest rates and inflation), company size and yield to maturity. Because this research is still a proposal, the expected outcome is the modeling of corporate bond yields on the IDX referring to the bond risk premium model. The author's modeling will add to the unique determinants of bond yields that have not been discussed in depth by previous researchers namely bond rating, interest coverage and yield to maturity. The bond rating determines whether or not the company's bonds are in the eyes of investors in addition to being a requirement for the trading of corporate bonds on the IDX. Bond ratings are determined by interest coverage and yield to maturity of the bond issuer, company size and yield to maturity.

 

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