The purpose of this study is to investigate the influence of internal and external factors on the firm value of property and real estate companies listed in Indonesia Stock Exchange. The dependent variable used in this study is Price to Book Value. The Internal factors used in this study are a debt to equity ratio, asset growth, and return on equity, while the external factors used are inflation, exchange rates, and economic growth. The data collected from financial statements of companies in property and real estate companies listed in Indonesia Stock Exchange during the period from 2013 to 2017, and samples were taken from 20 companies. Panel data regression was applied to establish the relationship between dependent and independent variables. The results showed that the internal factors such as debt to equity ratio, return on equity, and asset growth had a significant positive relationship with price to book value. The external factors such as inflation had a significant positive relationship with a price to book value, the exchange rate had a significant negative relationship with a price to book value and the economic growth had no relationship with a price to book value. This study recommends that companies take a policy of using debt as a source of investment financing and also need to improve company performance. Companies need to pay attention and anticipate the changes of external factors, especially exchange rates, because the exchange rate is the most influential factor in the value of the company.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.