DETERMINANT FACTORS OF SHAREHOLDER VELUE CREATION OF MANUFACTURING COMPANIES LISTED ON IDX

Abstrak

In the world of investment, the shareholder interests are the main objective for the company. Companies always try to increase its value which will be increase shareholders wealth because they are the owners of the remaining assets of the company, after all obligations are fulfilled. Increasing shareholders value shows an increase in company’s performance. Various decisions of a company have various impact on shareholder value. This study aims to determine the factors that influence the creation of shareholders value of 111 manufacturing companies which listed on IDX during 2011 – 2015. The shareholder value in this study is measured using market book value (MBV). Using qualitative method with 555 sample observations, this study shows that external financing policy through issuance debt and equity influence the creation of shareholders value. Meanwhile, internal financing policy does not affect shareholder value. Moreover, there are other factors that also determine shareholder value creation: profitability, dividend policy, and size. These three factors have positive effect on shareholder value. Every company is expected to be able to take the right policies to optimize the value of their shareholders.