Fundamental Analysis of Stocks in Determining Investment Decisions on Mergers and Acquisitions Company on the Indonesia Stock Exchange Using the Free Cash Flow to Equity Method in 2019-2021
Al Fajri Rizqiqa Illahi Akbar, Maria Ulpah, Ph.D.

Universitas Indonesia

Abstract

The purpose of this study is to determine the fundamental analysis of stocks in determining investment decisions on mergers and acquisitions company on the Indonesia Stock Exchange using the Free Cash Flow to Equity Method in 2019-2021. This study aims to determine the effect of the free cash flow to equity method on investment decisions in companies that have conducted mergers and acquisitions listed on the Indonesia Stock Exchange. The population of this study consists of six companies that have carried out mergers and acquisitions. In the sample tested, there are 18 stock intrinsic values calculated using the FCFE method in the period 2019-2021. This study uses a model to examine the relationship between intrinsic value and real stock prices. The Wilcoxon Signed Test is a nonparametric test used to measure the difference between two groups of paired data on an ordinal or interval scale, but the data is not normally distributed. The test results prove that stock fundamental analysis has an effect on investment decisions by using the free cash flow to equity method in companies that have made mergers and acquisitions.

Keywords: Investment Decision, Free Cash Flow to Equity method, Mergers and Acquisitions

Topic: Financial