Firm Value in a Situation of Free Cash Flow and Investment Sensitivity, External Finance Constraint and Information Asymmetry

Rina Br. Bukit, Sri Mulyani, Fahmi N. Nasution, Phou Sambath

2019

Abstract

Good company value is an important goal of the company. But companies that have many stakeholders and face various problems such as conflict of incentives and information asymmetry, often have difficulty in maximizing the value of their companies. A fall in the value of a company can harm all parties including investors. The supervisory system for company management decisions is very necessary to reduce losses and adverse effects from the decline in company value. However, in-depth research on the company's value model in situations where there is sensitivity to cash flows and investment, information asymmetry and restrictions on external funding are still rarely carried out. The research objective is to test the company's value model in situations there is free cash flow, investment, information asymmetry, and external funding restrictions. The study population is a non-banking company listed on the Indonesia Stock Exchange in 2014-2016. This study uses secondary data. The dependent variable of this study is the value of the company and the independent variable is the sensitivity of cash and investment flows, information asymmetry, and external funding restrictions. The data analysis method used in this study is a multiple regression analysis model. This study finds that free cash flow, investment and external funding restrictions influence firm value.

Paper Citation

in Harvard Style

Bukit R., Mulyani S., Nasution F. and Sambath P. (2019). Firm Value in a Situation of Free Cash Flow and Investment Sensitivity, External Finance Constraint and Information Asymmetry. In Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC, ISBN 978-989-758-498-5, pages 625-631. DOI: 10.5220/0009328306250631

in Bibtex Style

@conference{ebic19,
author={Rina Br. Bukit and Sri Mulyani and Fahmi N. Nasution and Phou Sambath},
title={Firm Value in a Situation of Free Cash Flow and Investment Sensitivity, External Finance Constraint and Information Asymmetry},
booktitle={Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC,},
year={2019},
pages={625-631},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0009328306250631},
isbn={978-989-758-498-5},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC,
TI - Firm Value in a Situation of Free Cash Flow and Investment Sensitivity, External Finance Constraint and Information Asymmetry
SN - 978-989-758-498-5
AU - Bukit R.
AU - Mulyani S.
AU - Nasution F.
AU - Sambath P.
PY - 2019
SP - 625
EP - 631
DO - 10.5220/0009328306250631