Formal Capital Markets

A. Background
Capital market is the place between the parties that require capital investment with the owner of both individuals and groups. Emiten for capital market functions as a means to obtain funds from the investment community for funding. Stock investment is a risky investment. The risk of investment shares have two forms, namely: (1) non-systematic risk, the risk arising from having only one type of stock, (2) systematic risk, the risk because the stock price variability is concerned, the risk is still there on every type of shares arising by movement of stock prices in market (Jogiyanto, 1998).

Capital market in the narrow sense is a market (where, in the form of the building) that is prepared to deal in shares-stocks, bonds, bonds, securities and other services with a broker traders effects. expected capital markets expected can be useful for emiten, investors, government agencies and support.
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Husnan (2001: 3) a formal capital markets can be defined as the market for various financial instruments (securities) that can be long-term sale, either in the form of debt or their own capital, both issued by the government, public authorities, and companies will expects to obtain with low cost capital through the sale of part of obligasi.
Terms of the main desired by the investor is willing to distribute the funds through the capital market is feeling safe on the investment. Feeling secure this arises because the investors obtain information that is correct, complete, and timely, enabling investors to take a rational decision. One of the factors that making investment decisions by rational investors is the level of risk. In an effort to reduce the risk faced, investors will base decisions in dipasar capital deal in the different information that it has good information available in the factory as well as private.

Investors who infuse capital in the form of a stock hoping to gain dividend and capital gain (Darmadji and Fakhruddin 2001: 9). Dividend is the proportion of profit or benefit that is distributed to shareholders in the amount proportionate to the number of shares held. Capital gain advantage while the investor held the shares have a market price higher than the price at the time of purchase. An investor in determining the shares purchased or sold will consider the information available. This information is useful as a consideration to determine the level of benefits with the risks of stock bought or sold. One of the existing information and is available in market dividend announcement. The form of dividends have two kinds,