NDLI: Implementation of Capm, Fama-French Three-Factor, and Five-Factor in Indonesia Stock Exchange and Cement Industry Sector

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Implementation of Capm, Fama-French Three-Factor, and Five-Factor in Indonesia Stock Exchange and Cement Industry Sector

Content Provider	Directory of Open Access Journals (DOAJ)
Author	Dewa Nyoman Wiryasantika Wedagama Dedi Budiman Hakim Bambang Juanda Trias Andati
Abstract	Weighting Average Cost of Capital (WACC) plays a critical role as a discounting factor of the corporate valuation process's estimated future free cash flow by highly influencing the valuation process. It consists of three components, namely cost of debt, cost of equity, and proportion of capital structure. Costs of debt and capital structure are easily calculated due to data stability and less volatility. Meanwhile, the cost of equity is difficult to determine due to assumption, the period taken, the method applied, and complexity. Many assets pricing methods are used to determine the required rate of return in equity, namely CAPM, Fama French Three-Factor (FF3F), and Fama French Five-Factor (FF5F). These three asset pricing models are used to determine the models with strong explanatory factors on equity return to portfolios developed from sorting FF5F factors and individual equity of four cement companies publicly listed in the Indonesia Stock Exchange (IDX).
Related Links	https://econjournals.com/index.php/ijefi/article/view/12805
e-ISSN	21464138
DOI	10.32479/ijefi.12805
Journal	International Journal of Economics and Financial Issues
Issue Number	2
Volume Number	12
Language	English
Publisher	EconJournals
Publisher Date	2022-01-01
Publisher Place	Türkiye
Access Restriction	Open
Subject Keyword	Business Economics As a Science Valuation Wacc Cost of Equity Capm Fama-french Three Factors Fama-french Five Factors
Content Type	Text
Resource Type	Article

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