VALUATION MODEL MEASURING INTRINSIC VALUE IN FINANCIAL SERVICES COMPANIES LISTED ON INDONESIA STOCK EXCHANGE

Abstract

The aim of this study is to determine the intrinsic value of the shares of financial sector companies listed on the IDX in 2015-2019 using the Dividend Discount Model, the Price Earnings Ratio and the Residual Income Model (RIM) approaches, to determine the value of company shares in the finance sector in the form of undervalued, overvalued or true value, and to make the right investment decisions based on the calculated intrinsic value. This research was conducted on 20 companies that consistently distributed dividends during the study period. In-depth data collection techniques Purposive sampling techniques have been used in this study. The data used is secondary. The result of this analysis is that the average portfolio of financial firms in 2015-2019 is undervalued, the most reliable valuation of stock values is the Dividend Discount Model (DDM) approach with the smallest RMSE value and the most effective investment decision-making.