THE MOST INFLUENTIAL FACTORS TOWARD FIRM VALUE (CASE STUDY IN INDONESIA)

Abstract

ABSTRACT

The purpose of this research is to investigate the most influential factor among investment decision, financing decision, and dividend policy toward firm value. We conducted our own research, and later compare our conclusions with other researcher’s conclusions. In our own research investment decision is measured using Price Earnings Ratio (PER), financing decision is measured using Debt Equity Ratio (DER), dividend policy is measured using Dividend Payout Ratio (DPR), and firm value is measured using Price Book Value (PBV). We use 109 samples from publicly listed manufacturing companies in Indonesia Stock Exchange (Bursa Efek Indonesia) in 2014, 2015, and 2016. Our own research uses classic assumption test as the data analysis and multiple regression analysis as the hypothesis test using IBM SPSS Statistics 20. Results of our own research show that: investment decision influences firm value, financing decision does not influence firm value, and dividend policy influences firm value. After that we compare our result with other researcher’s results. Final conclusion investment decision is the most influential factor toward firm value compared to financing decision and dividend policy.

KeyWords: Investment Decision, Financing Decision, Dividend Policy, Firm Value