Internal factors and firm value: A case study of banking listed companies

Hesty Juni Tambuati Subing, Rini Susiani

Abstract


The weakening of the value of the rupiah against the US dollar has made Indonesia again experiencing economic crisis conditions. However, this condition did not make the performance of the banking sector share decline and vice versa, defeating nine other industrial sectors, this indicates that the firm value in the banking sector is still considered good by investors, which are the factors that influence the firm value? This study aims to analyze the factors that influence firm value in the banking sector and can be used by investors in making investment decisions. This research uses secondary data with 12 sample companies in the banking sector listed on the Indonesia Stock Exchange in the 2011-2016 period using the purposive sampling method and panel data regression analysis. The results of this study indicate that the variable interest income, a debt-equity ratio (DER) and firm age (AGE) influence the firm value (FV), while the managerial ownership variables and earnings per share (EPS) do not affect the firm value (FV). The results of these studies are expected to help companies and investors in decision making.

JEL Classification: G32, L25

DOI: https://doi.org/10.26905/jkdp.v23i1.2405


Keywords


Company Age; Company Value; Debt to Equity Ratio; Earning Per Share; Interest Income; Managerial Ownership

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