Investment Decisions, Funding Decisions, Dividend, and Firm Value (Study of Companies Listed on the Indonesia Stock Exchange)

DOI

10.2991/icaf-19.2019.11How to use a DOI?

Keywords

Investment Decisions, Funding Decisions, Dividend, Firm Value

Abstract

This study aims to examine whether decisions made by managers will have an impact on the firm value. This is based on the ability of managers to reduce information asymmetry through reports provided to stakeholders. The independent variables used in this study are investment decisions, funding decisions, and dividends, while the dependent variable in this study is the value of the company. This study uses a sample of manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2006-2016. The sample used must show that the company pays dividends for eleven consecutive years. Investment decisions are measured using market value to book ratio (MVA), funding decisions are measured using debt to equity ratio (DER), dividends are measured using dividend payout ratio (DPR) and company value is measured using price to book value (PBV). The results show that funding decisions have a positive and significant effect on firm value. This shows that stakeholders tend to see how the company allocates funds that have been processed, investors tend to prefer using internal funds in their funding decisions rather than external funding, and the right funding decisions will have an impact on the sustainability of the company. Dividends have a significant negative effect on firm value. This shows that stakeholders tend to disagree if the company pays dividends every year, because it will reduce the company's retained earnings to carry out the company's operations; they do not want the company's operations to be disrupted due to limited funding. Meanwhile, investment decisions have a negative and not significant effect on firm value.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Fitri Wahyuni
AU  - Hilma Tsani Amanati
PY  - 2019/11
DA  - 2019/11
TI  - Investment Decisions, Funding Decisions, Dividend, and Firm Value (Study of Companies Listed on the Indonesia Stock Exchange)
BT  - Proceedings of the 5th International Conference on Accounting and Finance (ICAF 2019)
PB  - Atlantis Press
SP  - 66
EP  - 72
SN  - 2352-5428
UR  - https://doi.org/10.2991/icaf-19.2019.11
DO  - 10.2991/icaf-19.2019.11
ID  - Wahyuni2019/11
ER  -