Title: EARNINGS MANAGEMENT AND OWNERSHIP STRUCTURE EFFECT OF DIVIDEND PAYER COMPANIES IMPACTED BY COVID 19 TO COST OF DEBT
Authors:
Irwanto Handojo And Kent Lambert
Abstract:
This study aims to explore the impact of earnings management on the cost of debt in dividend-paying companies affected by the covid-19 pandemic by considering performance signal and control from ownership structure of shareholders. In this context, the study analyses nine variables that potentially influence the cost of debt, including earnings management, profitability, liquidity, firm size, market to book ratio, institutional ownership, managerial ownership, governmental ownership, and foreign ownership. With the observation period from 2021-2023, where the impact of covid-19 is still felt, testing on companies that pay dividends can be concluded that earnings management does not affect creditors’ risk perception. Creditors consider the influence of control mechanisms by institutional shareholders and foreign shareholders so that the company’s ability to generate positive income and company size become important factors in determining debt costs. Another finding is that managerial ownership has a negative effect on debt costs.
Keywords: Earnings management, cost of debt, profitability, covid-19, institutional ownership, managerial ownership, governmental ownership, foreign ownership.
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