Siklus Kehidupan Perusahaan dan Kaitannya Dengan Investment Opportunity Set, Risiko dan Kinerja Finansial

Abstract

This study examined the effect of firms financial performance that include dividend yield, leverage, profitability, and systematic risk on the investment opportunity set (IOS) measured using market to book value of assets ratio on each of the firm’s life cycle. A sample of 171 firms meeting the selection criteria covering a five-year period from 1999-2003 was examined. The regression analysis was used to test the hypothesis that the examined variables affect the level of IOS in each of the firm’s life cycle. The findings indicated that on the initial expansion stage, dividend yield was found to have negative effect on IOS, profitability and systematic risk had positive effect. On the final expansion stage, three variables namely leverage, profitability, and systematic risk all had positive effect on IOS. For mature stage, two variables, leverage and profitability were found to have significant effect. Whilst, for decline stage, only leverage was found to have significant effect. Overall, this study suggested that the life cycle stage affect the decisions of management in their investment strategies.
Keywords: Financial Performance, Dividend Yield, Leverage, Systematic Risk, Investment Opportunity Set (IOS)