THE EFFECT OF BUSINESS RISK AND FINANCIAL DISTRESS ON FIRM VALUE IN THE TECHNOLOGY SECTOR

Abstract

The ever-changing economic conditions greatly affect company performance, especially during the Covid 19 pandemic, thus presenting business risks and financial difficulties that can occur at any time. This study aims to determine the effects of business risks and financial difficulties on firm value. This research uses quantitative research methods while data collection techniques are carried out by literature study. The population in this study were technology sector companies listed on the Indonesia Stock Exchange (IDX) in 2020-2022, the sample was determined using non-probability sampling techniques.  The data that has been collected is analysed using the Simultanenus Equation Model. The results showed that business risk and financial distress have a significant effect on firm value. These two factors can positively affect the financial performance and long-term prospects of a company, which in turn can have an impact on firm value.