Determinants of Firm Value as Measured by the Tobin’s Q: A Case of Malaysian Plantation Sector

Abstract

Generally, a firm's value indicates how well it has performed. Firms that perform well will attract more investor trust to invest in their business. Therefore, this study aims to investigate the factors that determine the value of Malaysian plantation sector companies using Tobin's Q and several firm-specific variables. An empirical investigation was done to measure the influence of each size, sales, leverage, return on assets, current ratio and earnings per share ratio, and business liquidity on firm value using panel data procedures. A sample of 30 companies listed under the plantation sectors either under the main board or Ace market on Bursa Malaysia were utilized with the spanning period from 2005-2019. The results demonstrated that the size of the firm, firm sales, firm leverage, liquidity, and return on invested assets were the primary determinants of a corporation's value. Earnings per share, on the other hand, was the only variable discovered to be insignificant in determining the firm's value. The results of this study have implications for companies seeking to improve their firm value.