Research Paper
Year: 2021 | Month: May | Volume: 8 | Issue: 5 | Pages: 146-151
DOI: https://doi.org/10.52403/ijrr.20210522
Analysis of the Effect of Company Size, Asset Growth, and Capital Structure on the Intrinsic Value of Property and Real Estate Companies in Indonesia
Margareth Dorti Panggabean1, Iskandar Muda2, Rina Br Bukit2
1Postgraduate Students Department of Property and Valuation Management at Universitas Sumatera Utara, Indonesia
2Postgraduate Lecturer Department of Property and Valuation Management at Universitas Sumatera Utara, Indonesia
Corresponding Author: Margareth Dorti Panggabean
ABSTRACT
The intrinsic value of a company refers to the real value of a company. Company value in the concept of intrinsic value is not just the price of a set of assets, but the value of the company as a business entity that has the ability to generate profits at a later date. In the company appraisal process, that how the capital structure can affect the value of the company or not, the presence of various risks, taxes, and other costs, as well as changes in leverage can increase the value of the company and reduce it. This study aims to analyze the effect of company size and asset growth through capital structure on the intrinsic value of companies in the property and real estate industry listed on the Indonesia Stock Exchange in 2018 with a total sample of 37 companies. The results of the analysis in this study indicate that company size has a positive and significant effect on capital structure, asset growth has no effect on capital structure, company size and asset growth have a positive and significant effect on intrinsic value, while capital structure has no effect on intrinsic value, and firm size and asset growth there are no direct effect on intrinsic value through capital structure. This study also obtained the result that firm size is more dominant in supporting intrinsic values of Property and Real Estate Companies in Indonesia.
Keywords: Company Size, Asset Growth, Capital Structure, Intrinsic Value.
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