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Journal of Engineering and Applied Sciences

Year: 2017  |  Volume: 12  |  Issue: 2  |  Page No.: 408 - 416

The Determinants of Firm Value on Commercial Banks in Indonesia

Kusiyah and Arief

Abstract

The main objective of the company is increasing the value of the company through increased political prosperity shareholders. Shareholders, creditors and managers are parties who have different interests and perspectives with regard to the company. In general, every company has two goals: short-term goals and long term goals. Short-term goal of the company is to make profits while the company’s long-term goal is to increase the value of the company. The value of the company is an important thing for a manager and for an investor. To meet the expectations of investors, financial managers trying to maximize the welfare of investors by making various decisions and policies for the financial investment decisions, financing decisions and dividend policy. Third financial decision was necessary because the decision was mutually affect one another and can affect the value of the company. The purpose of this research to study the impact of investment decisions, financing decisions and dividend policy on firm value. The data used are secondary data from go-public banking financial services company and analyzed using multiple regression. The results of this study are investment decisions and dividend policy affects the value of the company while the funding decision does not affect the value of the company. And simultaneous, investment decisions, financing decisions and dividend policy affects the value of the company. On the other side, the results indicate that there is positive relationship between investment decisions, financing decisions and dividend policy on firm value.

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