Does the Institutional ownership, Return On Asset and Leverage affect Company Value

  • Mira Mira Universitas Muhammadiyah Makassar
Keywords: Institutional Ownership, Return On Assets, Leverage, Company Value

Abstract

This study aims to determine the effect of institutional ownership, return on assets (ROA) and leverage on firm value. Testing is done using secondary data in the form of financial statements of manufacturing companies listed on the IDX. Data were analyzed using Multiple regression with SPSS 24.0. The managerial implication of this research is the large number of institutional ownership can encourage an increase and optimal oversight. A high ROA value will give a positive signal to investors that the company can generate large profits so that it becomes an attraction for investors to own company shares and will increase share prices and have an impact on increasing company value. High leverage becomes a positive signal for the market or potential investors and shows that manufacturing industry companies have applied the concept of trade of theory which means that companies whose capital structure is derived from debt and still benefit, the use of debt is the right alternative. But at some point an increase in debt will reduce the value of the company because the benefits derived from the use of debt are smaller than the costs incurred

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Published
2020-07-31
How to Cite
Mira, M. (2020). Does the Institutional ownership, Return On Asset and Leverage affect Company Value. Point of View Research Accounting and Auditing, 1(3), 88-94. https://doi.org/10.47090/povraa.v1i3.44