Effect of Profitability, Investment Opportunity Set and Good Corporate Governance on Company Value

ABSTRACT : The purpose of this study is to determine the effect of profitability, investment opportunity setand good corporate governance on firm value. This research is conducted at manufacturing companies in theconsumer goods industry sector on the Indonesia Stock Exchange 2017-2019. The population in this studyamounted to 45 companies with a sample of 31 for three years of observation, namely 2017-2019, resulting in93 observational data. The sampling technique used in this study is purposive sampling and is analyzed usingmultiple linear regression. This research succeeds in supporting the existence of a signal theory but cannotsupport the existence of agency theory. In addition, this research can also help interested parties to utilizefinancial and non-financial information in the form of company performance appraisal as well as considerationin determining investment decisions. The results obtained based on the data analysis conducted show that theprofitability and investment opportunity set have a positive effect on firm value. Meanwhile, good corporategovernance as proxied by the independent board of commissioners and the audit committee has no effect onfirm value.

Keywords -Company Value, Profitability, Investment Opportunity Set, Good Corporate Governance