Abstract
The objective of the present study is to investigate the impact of insider ownership, institutional ownership and capital structure on firm’s value. The population of this study is all manufacturing companies which are listed in Indonesia Stock Exchange (IDX) in the period of 2011-2016. We use panel data regression with 174 observations. For hypothesis testing, the present study employs the t-test with α 10% level of significance. The results suggest that institutional ownership and firm size have significant impact on firm’s value
Highlights
Investors normally seek to find stocks that can benefit them most
The objective of the present study is to investigate the impact of insider ownership, institutional ownership and capital structure on firm’s value
Based on the results of the research can be seen that the capital structure does not affect the value of companies in manufacturing companies listed on the Stock Exchange
Summary
Investors normally seek to find stocks that can benefit them most. The benefit can be in the form of dividend or capital gains. Higher return on stock investment earned by shareholders indicates that they are wealthier. The prosperity makes the company’s value high. Firm value can be observed from its stock market price. The higher the stock price of a company, the higher the value of the company. Firm value can be increased if the manager as an agent who runs the firm creates policies that in line with the shareholders objectives. Sometimes manager’s goals are different from shareholders. This condition is due to managers do not own the firm’s shares. The condition is known as agency conflict
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