Research Paper
Year: 2021 | Month: March | Volume: 8 | Issue: 3 | Pages: 302-308
Analysis of Intrinsic Value of Shares with Free Cash Flow to Firm Model and Relative Valuation for Coal Mining Issuers
Christian Natanael Tarigan1, Fachrudin2, Khaira Amalia Fachrudin2
1Postgraduate Students Department of Property and Valuation Management at Universitas Sumatera Utara, Indonesia
2Postgraduate Lecturer Department of Property and Valuation Management at Universitas Sumatera Utara, Indonesia
Corresponding Author: Christian Natanael Tarigan
ABSTRACT
Valuation is done to calculate company value. The results of the right valuation can be used in decision making. The purpose of this research is to estimate the intrinsic value of shares in PT. Bumi Resources, Tbk., PT. Delta Dunia Makmur, Tbk., PT. Alfa Energi Investama, Tbk. and PT. Bayan Resources, Tbk using two valuation models, namely free cash flow to firm model and relative valuation. The results showed that as of December 31, 2018, the intrinsic value of BUMI and DOID was Rp197.3 and Rp659.6 undervalued respectively against the market value of Rp124 and Rp525 and the intrinsic value of FIRE and BYAN as of December 31, 2018, respectively, was Rp6,709.9 and Rp19,226.4 were overvalued against the market values of Rp7,750 and Rp19,875. The implication of this research is that investors must consider the decision to be taken to invest in BUMI and DOID shares, because according to the results of this study dated December 31, 2018, BUMI and DOID were undervalued and started selling shares in FIRE and BYAN because of the greater market value of the intrinsic value of the company's shares.
Keywords: Intrinsic Value of Shares, Free Cash Flow to Firm Model, Relative Valuation.
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