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Equity Valuation using Free Cash Flow to Equity on IDX30 Index for 2022 to 2026 Period Projection

International Journal of Science and Management Studies (IJSMS)
© 2023 by IJSMS Journal
Volume-6 Issue-3
Year of Publication : 2023
Authors : Alvin Pratama, Dyah Shinta Kusumaningtyas
DOI: 10.51386/25815946/ijsms-v6i3p119
Citation:
MLA Style: Alvin Pratama, Dyah Shinta Kusumaningtyas "Equity Valuation using Free Cash Flow to Equity on IDX30 Index for 2022 to 2026 Period Projection" International Journal of Science and Management Studies (IJSMS) V6.I3 (2023): 215-223.

APA Style: Alvin Pratama, Dyah Shinta Kusumaningtyas, Equity Valuation using Free Cash Flow to Equity on IDX30 Index for 2022 to 2026 Period Projection, International Journal of Science and Management Studies (IJSMS), v6(i3), 215-223.
Abstract:
The purpose of this paper is to determine the intrinsic values of several companies listed in the Indonesian stock market.This study employs the two-stage Free Cash Flow to Equity (FCFE) valuation model and makes a five-year projection based on historical data from 2016 to 2021.Six listed companies from theIDX30 index, thirty are selected for this study based on certain criteria. Data used include annual reports, risk-free rates, and historical prices from individual company websites, Yahoo Finance, and the Indonesia stock exchange market authority (IDX) website. Results show that two consumer goods companies, INDF and UNVR,are undervalued, while four companies from various sectors, ASII, CPIN, MIKA, PTBA, are overvalued. This finding suggests that investors can apply a straightforward valuation model to determine the true value of companies and make investment decisions based on the results. However, the FCFE valuation model is based on a set of assumptions that may differ from one investor to another, leading to different valuation results.
Keywords: Equity Valuation, Discounted Cash Flow, Free Cash Flow to Equity, FCFE.
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