The Effect Of Investment Decisions, Debt Policy, Dividend Policy, And Profitability On The Value Of Property And Real Estate Companies Listed On The Indonesia Stock Exchange For The 2012-2014 Period

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The Effect of Investment Decisions, Debt Policy, Dividend Policy, and Profitability on the Value of Property and Real Estate Companies Listed on the Indonesia Stock Exchange for the 2012-2014 Period

Introduction

The Indonesian Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a vast array of companies listed across various sectors, including property and real estate. The value of these companies is influenced by a multitude of factors, including investment decisions, debt policy, dividend policy, and profitability. This study aims to investigate the effect of these factors on the value of property and real estate companies listed on the IDX during the 2012-2014 period.

Background

The property and real estate sector is a significant contributor to the Indonesian economy, with a growing demand for housing, commercial spaces, and infrastructure development. The sector's performance is closely tied to the overall economic growth of the country, making it an essential area of study for investors, policymakers, and industry stakeholders. The IDX provides a platform for property and real estate companies to raise capital, expand their operations, and increase their market value.

Research Objectives

The primary objective of this study is to examine the effect of investment decisions, debt policy, dividend policy, and profitability on the value of property and real estate companies listed on the IDX during the 2012-2014 period. The study aims to provide insights into the factors that contribute to the value of these companies, enabling investors, policymakers, and industry stakeholders to make informed decisions.

Methodology

This study employed a quantitative approach, using secondary data obtained from the annual financial statements of property and real estate companies listed on the IDX during the 2012-2014 period. The population of the study consisted of 45 property and real estate companies, with a sample size of 20 companies that fulfilled the criteria as a target population. The analysis method used in this study was multiple regression analysis with a significance level (α) of 5%.

Results

The results of the F test show that investment decisions, debt policies, dividend policies, and profitability have a significant effect on company value. However, the results of the T test indicate that investment decisions have a negative and insignificant influence on the company's value. Conversely, debt policy, dividend policy, and profitability are proven to have a positive and significant influence on the value of the company.

Investment Decisions

Investment decisions refer to the process of selecting and allocating resources to projects that are expected to generate returns. The results of the study show that investment decisions do not have a significant impact on the company's value. This can be caused by lack of efficient project management or less strategic investment, so it cannot increase value for shareholders.

Debt Policy

Debt policy refers to the management of debt financing, including the amount, type, and maturity of debt. The results of the study show that debt policy contributes positively to the company's value, which shows that the use of debt can wisely increase the value of the company. This may be because debt can be used to fund development projects that provide higher yields.

Dividend Policy

Dividend policy refers to the management of dividend payments, including the amount, frequency, and timing of dividends. The results of the study show that a good dividend policy can give a positive signal to investors about the company's financial health. Dividends that are consistent and increase can attract more investors, thereby increasing the value of the company.

Profitability

Profitability is an important indicator for investors, as profitable companies tend to have higher market value. The results of the study show that profitability has a positive and significant influence on the value of the company.

Conclusion

Overall, this study revealed that to increase the value of property and real estate companies listed on the IDX, it is essential for management to focus on managing debt policy, dividend policy, and increasing profitability. Investment decisions must be planned carefully in order to provide the expected results. In-depth understanding of these factors can help companies in making better strategic decisions in the future.

Recommendations

Based on the findings of this study, the following recommendations are made:

  1. Debt Policy: Companies should manage their debt policy effectively, using debt to fund development projects that provide higher yields.
  2. Dividend Policy: Companies should adopt a good dividend policy, providing consistent and increasing dividends to attract more investors.
  3. Profitability: Companies should focus on increasing profitability, as it is an essential indicator for investors.
  4. Investment Decisions: Companies should plan their investment decisions carefully, ensuring that they are strategic and efficient.

Limitations

This study has several limitations, including:

  1. Sample Size: The sample size of 20 companies may not be representative of the entire population of property and real estate companies listed on the IDX.
  2. Data Quality: The study relied on secondary data obtained from annual financial statements, which may not be accurate or complete.
  3. Time Period: The study focused on a specific time period (2012-2014), which may not be representative of the current market conditions.

Future Research Directions

Future research should focus on:

  1. Investigating the effect of other factors: Other factors, such as market conditions, economic growth, and industry trends, should be investigated to provide a more comprehensive understanding of the factors that influence the value of property and real estate companies.
  2. Using alternative data sources: Alternative data sources, such as financial statements from other countries or industries, should be used to provide a more diverse and representative sample.
  3. Examining the impact of regulatory changes: The impact of regulatory changes on the value of property and real estate companies should be examined to provide insights into the effects of policy changes on the industry.
    Frequently Asked Questions (FAQs) on the Effect of Investment Decisions, Debt Policy, Dividend Policy, and Profitability on the Value of Property and Real Estate Companies Listed on the Indonesia Stock Exchange

Q: What is the main objective of this study?

A: The primary objective of this study is to examine the effect of investment decisions, debt policy, dividend policy, and profitability on the value of property and real estate companies listed on the Indonesia Stock Exchange during the 2012-2014 period.

Q: What is the significance of this study?

A: This study is significant because it provides insights into the factors that contribute to the value of property and real estate companies listed on the Indonesia Stock Exchange. The findings of this study can help investors, policymakers, and industry stakeholders make informed decisions.

Q: What are the key findings of this study?

A: The key findings of this study are:

  • Investment decisions do not have a significant impact on the company's value.
  • Debt policy contributes positively to the company's value.
  • Dividend policy gives a positive signal to investors about the company's financial health.
  • Profitability is an essential indicator for investors.

Q: What are the implications of this study?

A: The implications of this study are:

  • Companies should focus on managing debt policy, dividend policy, and increasing profitability to increase their value.
  • Investment decisions must be planned carefully to provide the expected results.
  • In-depth understanding of these factors can help companies make better strategic decisions in the future.

Q: What are the limitations of this study?

A: The limitations of this study are:

  • The sample size of 20 companies may not be representative of the entire population of property and real estate companies listed on the Indonesia Stock Exchange.
  • The study relied on secondary data obtained from annual financial statements, which may not be accurate or complete.
  • The study focused on a specific time period (2012-2014), which may not be representative of the current market conditions.

Q: What are the future research directions?

A: The future research directions are:

  • Investigating the effect of other factors, such as market conditions, economic growth, and industry trends, on the value of property and real estate companies.
  • Using alternative data sources, such as financial statements from other countries or industries, to provide a more diverse and representative sample.
  • Examining the impact of regulatory changes on the value of property and real estate companies.

Q: What are the practical implications of this study for investors?

A: The practical implications of this study for investors are:

  • Investors should focus on companies with good debt policy, dividend policy, and profitability.
  • Investors should be cautious when investing in companies with poor investment decisions.
  • Investors should consider the current market conditions and industry trends when making investment decisions.

Q: What are the practical implications of this study for policymakers?

A: The practical implications of this study for policymakers are:

  • Policymakers should consider the impact of regulatory changes on the value of property and real estate companies.
  • Policymakers should focus on creating a favorable business environment that encourages investment and growth.
  • Policymakers should consider the current market conditions and industry trends when making policy decisions.

Q: What are the practical implications of this study for industry stakeholders?

A: The practical implications of this study for industry stakeholders are:

  • Industry stakeholders should focus on managing debt policy, dividend policy, and increasing profitability to increase their value.
  • Industry stakeholders should plan their investment decisions carefully to provide the expected results.
  • Industry stakeholders should consider the current market conditions and industry trends when making strategic decisions.