Influence of Profit quality on Return on Stock of Companies Listed on the Stock Exchange of Thailand
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Abstract
This research therefore aims to analyze the influence of profit quality, including earnings smoothing, earnings management, earnings persistence, and costs of equity that affect returns on stock. This research is quantitative. By collecting data from Form 56-1 on the website of the Stock Exchange of Thailand from 2018-2022, a total of 268 companies were analyzed by Multiple regression analysis. It was found that earnings persistence has a positive influence on the cost of equity, and it is found that earnings management has a negative influence on the cost of equity. It can indicate that earnings persistence can be forecast, which in turn affects dividend growth forecasts. As for earnings management, it is the decoration of the accounts at the discretion of the management. The outstanding items in the financial statements shown may not be of sufficient quality. As a result, dividends cannot be paid according to investor demand. It was also found that earnings persistence and cost of equity have a positive influence on return on stock. It was found that earnings management and earnings smoothing have a negative influence on return on stock.
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