| 摘要: | Due to the COVID-19 outbreak, the banking sector is one of the sectors that have the deepest slump in Indonesia's stock markets. However, over time, the banking sector continues to rise in price, even can exceed pre-covid prices. Consequently, there is a prospect of growth in the Capital market, which influenced the growing demand for valuation models for investors to take advantage of this increase in value and have the potential for a significant gain from their trades.
This thesis aims to compare the free cash flow to equity (FCFE) model and dividend discount (DDM) model used for valuing the commercial banks listed on the LQ45 index on Indonesia Stock Exchange. The samples of this research are BBCA, BBRI, BMRI, BBNI, and BBTN, commercial banks incorporated in the LQ45 index. The valuations will conclude if they are accurate business valuation methods and if one of the two models gives a more precise estimation of the companies' actual market values supported by basic relative valuation techniques. This thesis tries to answer whether one of the models is better for commercial banks in Indonesia. This thesis relies on primarily qualitative secondary data of the selected companies, from companies' financial reports, the Indonesia Stock Exchange website, and Bank Indonesia. |
