Share price Valuation model of Automotive Company in Indonesia

Cepi Pahlevi, Tarsimin, Mahlia Muis

Valuation, Free Cash Flow, Price to Earning, undervalued.

Stock price valuation is a common thing done by a public company that sells its shares on the Stock Exchange or a company that will conduct mergers and acquisitions. This study aims to build a valuation model for automotive companies in Indonesia that trade their shares on the Indonesia Stock Exchange. The design of this study uses proposed sampling data of automotive companies on the Indonesia Stock Exchange. The results of the multivariate price to earnings ratio model showed that return on assets (P = 0.0081 <0.5%) had a significant effect on price to earnings ratio while the other four variables dividend pay out ratio, cost of debt, debt to equity ratio, and risk (beta) the effect on the price to earnings ratio for automotive companies is less significant. The result of the determination test shows the R-square value = 0.1603 or around 16.03% the stock price is determined by the independent variable used in the study and the rest (83.97%) is determined by other factors this is because the variable used in this study is still purposed sampling of the financial historical data, so that researchers can then do valuations using variables other than those used in this study.

10.22161/ijaers.73.41