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Abstract

Valuation is a jargon that is referred to by decision makers, both financial and investment, all over the world. Whether every valuation is correct or biased has been the subject of much discussion and debate among economists to this day. From Modigliani to Damodaran and Fernandez, none of them claim to be the panacea. Ultimately, whether a valuation is correct or not, only time will tell. This article will discuss and examine the extent to which valuation with all its techniques and approaches can explain the true value of the company as reflected in the value of shares on the Indonesia Stock Exchange. The author uses the Discounted Cashflow (DCF) method given the various advantages and advantages over other methods in company valuation techniques. There are 10 companies listed on the Indonesia Stock Exchange that are valued using DCF with various elements, starting from the calculation of Free cash flow, Cost of Debt, Cost of Equity, Weigthed Average Cost of capital, Beta and the final result in the form of Value per share. Almost all valuations of companies on the IDX result in a Buy recommendation considering that almost all companies are under valued. This research produces findings, that Terminal Free Cash Flow and Equity are the variables that most affect Value per Share.

Keywords: Valuation of Company, WACC, Beta, Free Cash Flow