Free cash flow effect towards firm value

https://doi.org/10.21744/irjmis.v6n3.643

Authors

  • Ida Ayu Made Chandra Dewi Universitas Udayana, Denpasar, Indonesia
  • Maria Mediatrix Ratna Sari Universitas Udayana, Denpasar, Indonesia
  • I.G.A.N Budiasih Universitas Udayana, Denpasar, Indonesia
  • Herkulanus Bambang Suprasto Universitas Udayana, Denpasar, Indonesia

Keywords:

dividend payout, firm value, free cash flow, investment opportunity set, main board stock index

Abstract

A company is established to raise the value of the firm by maximizing profit and shareholder’s wealth. In the capital market, firm value is reflected in the stock price. To raise a firm value, needed to investigate the determinant of firm value. So, this research is aimed to determine the effect of free cash flow on firm value with dividend payout and investment opportunity set as mediator. Population in this research was companies listed on the Main Board Stock Index in Indonesian Stock Exchange for 2013-2017. The sample is 189 observation and it was taken by using purposive sampling technique. Data analysis technique used in this research is path analysis and Sobel test. This research founded that free cash flow has a positive significant effect on firm value and dividend payout, free cash flow has a negative effect on investment opportunity set, dividend payout has a positive significant effect on firm value, and investment opportunity set has a positive significant effect on firm value. Furthermore, dividend payout act as a mediator on the effect of free cash flow on firm value, but investment opportunity unable to mediate the effect of free cash flow on firm value.

Downloads

Download data is not yet available.

References

Al Zararee, A. N., & Al-Azzawi, A. (2014). The impact of free cash flow on market value of firm. Global Review of Accounting and Finance, 5(2), 56-63.

Arfan, M., & Maywindlan, T. (2013). Pengaruh Arus Kas Bebas, Collateralizable Assets, dan Kebijakan Utang Terhadap Kebijakan Dividen Pada Perusahaan Yang Terdaftar Di Jakarta Islamic Index. Jurnal Telaah dan Riset Akuntansi, 6(2), 194-208.

Brigham, E. F., Ehrhardt, M. C., Nason, R. R., & Gessaroli, J. (2016). Financial Managment: Theory And Practice, Canadian Edition. Nelson Education.

Efni, Y. (2011). Analisis Kebijakan Pendanaan, Kepemilikan Manajerial dan Aliran Kas Bebas terhadap Kebijakan Dividen Pada Perusahaan Non Manufaktur yang Terdaftar di Bursa Efek Indonesia (BEI). Jurnal Ekonomi, 19(01).

Embara, C. T. D. L. (2012). Variabel-Variabel Yang Berpengaruh Terhadap Kebijakan Dividen Serta Harga Saham Pada Perusahaan Manufaktur Di Bursa Efek Indonesia. Matrik: Jurnal Manajemen, Strategi Bisnis dan Kewirausahaan.

Esana, R., & Darmawan, A. (2017). Pengaruh Kebijakan Dividen dan Keputusan Investasi terhadap Nilai Perusahaan Serta Dampaknya terhadap Profitabilitas T+ 1 (Studi pada Sub Sektor Industri Barang Konsumsi yang Terdaftar di Bei Periode 2006-2016). Jurnal Administrasi Bisnis, 50(6), 201-210.

Fama, E. F., & French, K. R. (1998). Taxes, financing decisions, and firm value. The Journal of Finance, 53(3), 819-843. https://doi.org/10.1111/0022-1082.00036

Febriana, E., & Djawahir, A. H. (2016). Pengaruh Struktur Modal, Kebijakan Dividen, Ukuran Perusahaan, Kepemilikan Saham Manajerial dan Profitabilitas Terhadap Nilai Perusahaan (Studi pada Perusahaan Manufaktur yang Terdaftar di BEI Pada 2011-2013). Ekonomi Bisnis, 21(2), 163-178.

Fenandar, G. I., & Raharja, S. (2012). Pengaruh keputusan investasi, keputusan pendanaan, dan kebijakan dividen terhadap nilai perusahaan (Doctoral dissertation, Fakultas Ekonomika dan Bisnis).

Ghodrati, H., & Hashemi, A. (2014). A study on relationship among free cash flow, firm value and investors’ cautiousness: Evidence from Tehran Stock Exchange. Management Science Letters, 4(9), 2001-2010.

Gordon, M. J. (1963). Optimal investment and financing policy. The Journal of finance, 18(2), 264-272. https://doi.org/10.2307/2977907

Hermuningsih, S. (2012). Pengaruh profitabilitas, size terhadap nilai perusahaan dengan sruktur modal sebagai variabel intervening. Jurnal Fakultas Hukum UII, 16(2).

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of financial economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X

Kouki, M., & Guizani, M. (2009). Ownership structure and dividend policy evidence from the Tunisian stock market. European Journal of Scientific Research, 25(1), 42-53.

Kouki, M., & Guizani, M. (2009). Ownership structure and dividend policy evidence from the Tunisian stock market. European Journal of Scientific Research, 25(1), 42-53.

Kusumajaya, D. K. O. (2011). Pengaruh struktur modal dan pertumbuhan perusahaan terhadap profitabilitas dan nilai perusahaan pada perusahaan manufaktur di bursa efek Indonesia. Universitas Udayana, Denpasar: Tesis yang Tidak Dipublikasikan.

Lucyanda, J. (2012). Pengaruh Free Cash Flow dan Struktur Kempemilikan Terhadap Dividend Payout Ratio. Jurnal Dinamika Akuntansi, 4(2). https://doi.org/10.15294/jda.v4i2.2171

Myers, S. C. (1977). Determinants of corporate borrowing. Journal of financial economics, 5(2), 147-175. https://doi.org/10.1016/0304-405X(77)90015-0

Naini, W. D., & Ismiwatis, D. (2014). Pengaruh Free Cash Flow Dan Kepemilikan Institusional Terhadap Kebijakan Hutang Dan Nilai Perusahaan. Jurnal Ilmu Dan Riset Akuntansi, 3(4), 1-17.

Nuryani, N. N. J., Satrawan, D. P. R., Gorda, A. A. N. O. S., & Martini, L. K. B. (2018). Influence of human capital, social capital, economic capital towards financial performance & corporate social responsibility. International Journal of Social Sciences and Humanities, 2(2), 65-76. https://doi.org/10.29332/ijssh.v2n2.128

Ogunsiji, A., & Ladanu, W. (2017). A theoretical study of performance measures in the strategic and corporate entrepreneurships of firms. International Journal of Physical Sciences and Engineering, 1(1), 72-80. https://doi.org/10.21744/ijpse.v1i1.15

Rizqia, D. A., & Sumiati, S. A. (2013). Effect of Managerial Ownership, Financial Leverage, Profitability, Firm Size, and Investment Opportunity on Dividend Policy and Firm Value. Research Journal of Finance and Accounting, 4(11), 120-130.

Rosdini, D. (2009). Pengaruh free cash flow terhadap Dividend Payout Ratio. Department of accounting. Universitas Padjajaran. Bandung.

Senata, M. (2016). Pengaruh Kebijakan Dividen terhadap Nilai Perusahaan yang tercatat pada Indeks LQ-45 Bursa Efek Indonesia. Jurnal Wira Ekonomi Mikroskil: JWEM, 6(1), 73-84.

Suartawan, I. G. N. P. A., & Yasa, G. W. (2016). Pengaruh Investment Opportunity Set dan Free Cash Flow Pada Kebijakan Dividen dan Nilai Perusahaan. E-Jurnal Akuntansi, 2014-2044.

Suherli, M., & Harahap, S. S. (2007). Studi Empiris Terhadap Faktor Penentu Kebijakan Jumlah Dividen. Media Riset Akuntansi, Auditing & Informasi, 4(3), 223-245.

Thanatawee, Y. (2011). Life-cycle theory and free cash flow hypothesis: Evidence from dividend policy in Thailand. International Journal of Financial Research, 2(2).

Wijaya, B. I., & Sedana, I. B. (2015). Pengaruh profitabilitas terhadap nilai perusahaan (kebijakan dividen dan kesempatan investasi sebagai variabel mediasi). E-Jurnal Manajemen Universitas Udayana, 4, 12.

Published

2019-05-31

How to Cite

Dewi, I. A. M. C., Sari, M. M. R., Budiasih, I., & Suprasto, H. B. (2019). Free cash flow effect towards firm value. International Research Journal of Management, IT and Social Sciences, 6(3), 108–116. https://doi.org/10.21744/irjmis.v6n3.643

Issue

Section

Peer Review Articles

Most read articles by the same author(s)

1 2 > >>