Proceedings of the 3rd Global Conference On Business, Management, and Entrepreneurship (GCBME 2018)

Test of FCFE Model and Dividend Discount Model in Book 4 Banking Companies Listed in Indonesia Stock Exchange

Authors
R. Hendrawan, T.Z. Rahayu
Corresponding Author
R. Hendrawan
Available Online 7 February 2020.
DOI
10.2991/aebmr.k.200131.030How to use a DOI?
Keywords
FCFE Model, Dividend Discount, Stock
Abstract

The banking industry is one of the industries that shares in great demand by the people who will invest in the capital market. Not only interested by local investors but also even banking industry stocks are in great demand from foreign investors. The purpose of this research is to know the fair price of shares in banking companies in 2017 by using the method of Free Cash Flow to Equity on the growth scenario in pessimistic, moderate and optimistic conditions and to know the fair price of shares in banking companies, in 2017 by using Dividend Discount Model Method. The sampling technique used purposive sampling and chose 4 Banking Com panies which entered into book 4 category as research sample. Finding from this research shows that, using FCFE Model BBNI, BMRI and BBCA are undervalued, that stock market price is lower than fair value of company stock, while BBRI show overvalued and by using DDM calculation method all stock show undervalued. If it is known whether the stock is undervalued, fair valued, or overvalued, then the investor can be more confident to determine his investment decision. Whether the stock wants to be bought, retained or sold.

Copyright
© 2020, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the 3rd Global Conference On Business, Management, and Entrepreneurship (GCBME 2018)
Series
Advances in Economics, Business and Management Research
Publication Date
7 February 2020
ISBN
10.2991/aebmr.k.200131.030
ISSN
2352-5428
DOI
10.2991/aebmr.k.200131.030How to use a DOI?
Copyright
© 2020, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - R. Hendrawan
AU  - T.Z. Rahayu
PY  - 2020
DA  - 2020/02/07
TI  - Test of FCFE Model and Dividend Discount Model in Book 4 Banking Companies Listed in Indonesia Stock Exchange
BT  - Proceedings of the 3rd Global Conference On Business, Management, and Entrepreneurship (GCBME 2018)
PB  - Atlantis Press
SP  - 142
EP  - 146
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200131.030
DO  - 10.2991/aebmr.k.200131.030
ID  - Hendrawan2020
ER  -