FAKTOR-FAKTOR INTERNAL KEPUTUSAN HEDGING DAN DAMPAKNYA PADA NILAI PERUSAHAAN MISCELLANEOUS INDUSTRY

Abstract

This study aims to analyze hedging factors and their effect on the corporate value of miscellaneous industry in 2012-2017. The sample of this study was 31 companies through purposive sampling technique. The logistic regression test results showed that the debt to equity ratio, market book value to equity, capital expenditure to book value assets, interest coverage ratio did not affect hedging decision because of the dominance of domestic funding sources and related parties, the companys financial position decreased, and haven’t experience in loss. Firm size has a positive effect on hedging because large operational activities allow transactions involving foreign currencies. Financial distress has a negative effect because of financial problems so that, something weren’t urgent will be trimmed. OLS test results show that hedging also affects the corporate value because the market considers that the company is responsive to risk. Thus, when the size of the company gets bigger, the company needs to hedge. Furthermore, if the company experiences financial difficulties, the company should not use hedging because the allocation of funds can be transferred to interest payments. Then for investors, have to pay more attention to the use of hedging. If the company is supposed to use hedging which is driven by firm size factors but they don’t, the company has a greater risk of exposure.