Proceedings of the 25th International Academic Conference, OECD Headquarters, Paris

THE EFFECT OF EARNINGS PER SHARE, BOOK VALUE AND SYSTEMATIC RISK ON EQUITY VALUATION IN MANUFACTURING COMPANY LISTED ON INDONESIAN STOCK EXCHANGE FOR THE YEAR 2011-2014

MUSLIM ABDUL DJALIL, MIRZA TABRANI, JALALUDDIN

Abstract:

The objectives of this research are to measure the partial and simultaneous influence of : the Earning Per Share (EPS) on Equity Valuation, Book Value on Equity Valuation, and Systematic Risk on Equity Valuation. With a quantitative model employed, the data collected in this research are hence based on secondary sources of which are derived from audited financial statements published by the capital market reference centre at the Indonesia Stock Exchange. The research used random sampling method in selecting the researched sample. From the population of all manufacturing companies of 2011-2014 that consistently listed in Indonesian Stock Exchange, it was selected 96 mixed manufacturing companies as the research sample. This research used multiple linear regression equation to test the researched hypotheses and employed SPSS statistical software for data processing. The outcome of research indicated that Earning Per Share (EPS) partially has a significant positive influence on Equity Valuation; Book Value partially has a significant negative influence on Equity Valuation; Systematic Risk partially does not have a significant influence on the Equity Valuation; and Earning Per Share (EPS), Book Value, and Systematic Risk have a simultaneous influence on Equity Valuation. The using combined three variables of EPS, Book Value, and Systematic Risk influencing on Equity Valuation in the context of a combined type of manufacturing companies as a theoretical research framework with data sample from a listed manufacturing companies’ audited financial statements as far as the researcher’s concerned is the novelty of this research. The major limitations of the research that it does not reflect deeply the performance of the industry and unable to capture the individual managerial perceptions involved in the industry

Keywords: Earning Per Share (EPS), Book Value, Systematic Risk, and Equity Valuation, Manufacturing Company

DOI: 10.20472/IAC.2016.025.016

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