Dividend Payout Ratio: Factors That Affect IT, and Subsequent Earning Growth

This paper is to investigate the determinants of the Dividend Payout Ratio (DPR) of Indonesian firms. Five factors (maturity, cash availability, leverage, profitability, firm size) are analyzed as the DPR determinants. Additionally, this thesis also examines the ability of DPR to serve as a signal subsequent year's earnings growth. Multiple regression models is used in this paper to analyze research sample that consists of 180 firms that are listed in Indonesia Stock Exchange (IDX) and paid dividends during 2003-2008. The results shows that cash availability and maturity are significant determinants of DPR. Further analysis shows that the DPR signals subsequent earnings growth, the result concludes that mature firms has high dividend payment ratio, which supports firm lifecycle theory. High DPR results in high subsequent earnings growth, which supports Black's (1976) claim that DPR carries information on future growth

Analysis of Corporate Governance and Relative Efficiency of Public Companies Listed in Indonesian Stock Exchange

This research aims to investigate the relationship between corporate governance and company's relative efficiency. The research sample is 34 public companies listed in Indonesian Stock Exchange. A modified Jones (1991) model is used to detect the earnings management practice as a proxy to corporate governance. In regard with the efficiency score, this research employs Data Envelopment Analysis (DEA). This research find that the there is no significant relationship between corporate governance and its efficiency

Real Options Approach: a Bank Acquisition by Bank X

Indonesia offers a lot of promising growth opportunities and particularly to the banking industry, a combination of attractive macro-economic conditions and introduction of new regulatory policies as well as reformation to consolidate and strengthen the banking sector primarily by M&A activity provides an attractive backdrop for acquisition of Indonesian banks by foreign investors. In this paper, we introduce real options theory as an alternative to a traditional project valuation for a bank acquisition that would allow the acquiring firm to recognize the options embedded in their investments. The objective of this case study is to analyze, from real options perspective, whether the acquisitions of the target firm compliment the acquiring firm. The methods use for the analysis are DCF, Black-Scholes and Binomial Lattice that would help determine the project real value, which result suggested that the acquiring firm should reconsider their options. On this thesis, the DCF method suggesting that the acquisition of Bank Y by Bank X does increase the value of Bank X but there would not be added value on the synergy itself. While from the real options perspective, the project value (with and without real options flexibility) is worth less than the target firm underlying assets and has doubtful prospect

Empirical Studies on Eva and Profitability Ratios Association with Annual Stock Return for Indonesia Companies

This research analyzes the influence of Economic Value Added (EVA) and profitability ratios measurement on Indonesian public companies stock returns. The companies are firms that are listed in the Indonesia Stock Exchange (IDX) and that take part in the LQ45 group. The profitability ratios that are used in this research are profit margin (PM), return on sales (ROS), return on equity (ROE), and return on assets (ROA). The aim of this research is to prove the claim that EVA is associated more with company annual stock return rather than profitability ratios. The methodology that is used in this research is a multiple regression test to measure the significance between EVA, profit margin (PM), return on sales (ROS), return on equity (ROE), and return on assets (ROA) with the company annual stock returns. The research result shows that in the end the research prove that EVA does not influence profitability ratios in association with company stock returns. The evidence indicates that profitability ratios are closely associated with company stock returns with the highest significance. More specificly, return on equity (ROE) is the most associated profitability ratio with stock returns followed by return on assets (ROA)

The Degree of Company Vulnerability Using Altman Model: a Survey of Public Listed Companies in Indonesia

This research is purposed to analyze the degree of vulnerability of a company's performance. From the financial report produced, investor will analyze the level of its performance. There are several variables of defining the performances, in which they are used to distinguish the degree of vulnerability. This level of degree affects investor's decision on company's performance. The object of this research, after taking relevant data from years 2006- 2008 published annual financial reports, there are 184 public companies listed in Indonesian Stock Exchange that are qualified in the analysis procedure. The Altman (1993) model of Z-score formula is used to define variables reflecting in a company performance, in which is classified into three-zone index (safe zone, grey zone and distress zone). This research has found that more companies lie in the grey and distress zone. Amongst the safe zone companies are Mining Industry and the lowest degree is the Infrastructure Industry. Also, a trend of decreasing performance occurred during 2008. There are possible reasons that might result in the performance of the industries. This result of research will benefit for investors in considering investing in Indonesian companies