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Stock Valuation Analysis of Dividend Discount Model, Free Cash Flow to Equity and Walter Model in Investment Decision

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  • Apriliana Ika Kusumanisita
  • Frilya Hajar Minanti

Abstract

This study aimed to (1) test the influence of stock valuation with dividend discount model (DDM) method on investment decisions, (2) test the influence of stock valuation with Free Cash Flow to Equity (FCFE) method on investment decisions, and (3) test the influence of stock valuation with Walter Model method on investment decisions in Consumer Good Industry Companies listed in ISSI period 2016-2019. 24 Companies in the Consumer Good Industry sector were sampled in this study. The data used was secondary data. The results of this study show that the Dividend Discount Model (DDM) has a significant positive influence on investment decisions, while the Free Cash Flow to Equity (FCFE) and Walter Model methods do not have a significant influence on investment decisions

Suggested Citation

  • Apriliana Ika Kusumanisita & Frilya Hajar Minanti, 2021. "Stock Valuation Analysis of Dividend Discount Model, Free Cash Flow to Equity and Walter Model in Investment Decision," Agregat: Jurnal Ekonomi dan Bisnis, Universitas Muhammadiyah Prof. DR HAMKA., vol. 5(1), pages 78-96.
    • Handle: RePEc:apn:agregt:v:5:y:2021:i:1:p:78-96:id:6832
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    File URL: https://journal.uhamka.ac.id/index.php/agregat/article/view/6832
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    1. Haryo Kuncoro, 2011. "The Sustainability Of State Budget In Debt Repayment," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 13(4), pages 415-434, April.
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