Beranda > Bisnis Manajemen, Financial management > Relationship between Value Relevance and Advertising and Promotion Cost (Study In Telecommunication Company)

Relationship between Value Relevance and Advertising and Promotion Cost (Study In Telecommunication Company)

ABSTRACT of THESIS

This research is aimed at describing book value, income value and cash flow to explain value relevance in Indonesia Telecommunication Company and identifying relationship between value relevance and advertising and promotion cost.

Sample in this research is all telecomunication company that are listed in indonesia stock exchange in the year 2007 and 2008. In this research there are two model analyzed. The first model is to describe value relevance, and the second is to explain relationship between value relevance and advertising and promotion cost. To identify value relevance (book value, income value and cash flow) that correlate with stock price used correlation test and simple liner regretion appropriate with price level regression model developed by Ohlson (1995). The power of the relation measured from correlation coefficient (r) and enormity of each variable contribution measured from adjusted determinant coefficient (R2) with condition that variable that have biggest adjusted R2 reputed have biggest value relevance. To explain relationship between value relevance and advertising and promotion cost used correlation statistic test and simple linier regression between variable that have biggest adjusted R2 based on previous model with advertising and promotion cost.

The result of this research showed that variable that have biggest adjusted R2 is book value that is 0.882, so that  book value become value relevance variable  in the second model. The result of the second examination showed significant negative relationship between value relevance (book value) and advertising and promotion cost. The result of this research conclude that the greater advertising and promotion cost expensed by a telecommunication company because the company is in decreasing value.

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  1. Adell
    November 6, 2012 pukul 1:01 pm

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  2. Johannesburg
    November 8, 2012 pukul 11:11 am

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  3. christalpoland
    November 12, 2012 pukul 10:27 pm

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