Determinants of Capital Structure and Their Effect to Company’s Value: Study in LQ 45 Companies Listed in Indonesia Stock Exchange

Authors

  • Andi Kartika Faculty of Economic and Business, Universitas Stikubank Indonesia, Indonesia
  • Sunarto Sunarto Faculty of Economic and Business, Universitas Stikubank Indonesia, Indonesia
  • Faisal Riza Rahman Faculty of Economic and Business, Universitas Stikubank Indonesia, Indonesia
  • Zaky Machmuddah Faculty of Economic and Business, Universitas Dian Nuswantoro Indonesia, Indonesia

DOI:

https://doi.org/10.36941/ajis-2020-0051

Abstract

The aim of the research is to analyse the effect of  profitability, liquidity, and company’s size to company’s value and examines whetherDERis a mediating variable. Secondary data is taken from annual report of the companies. Analysis method used is multiple regression analysis (least square).  The finding of the research showed thatDER mediated  the relationship between CR  andTobin’s Q. However DER is not a mediating variable for the relationship betweenRNOAand TOBINas well as between SIZE  and Tobin’s Q. Mediating test is conducted by Sobel Test. The other finding is that RNOA positively affects to DER. CR negatively affects to DER. SIZE positively affects to DER and then DER negatively affects to Tobin’s Q. Recommendation for future research is to widen the samples, not just  42 companies, to add observed periods to give clearer description in long term.The next research can also use other dependent variables affecting capital structure and company’s value.

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Published

2020-05-10

How to Cite

Kartika, A. ., Sunarto, S. ., Rahman, F. R. ., & Machmuddah, Z. . (2020). Determinants of Capital Structure and Their Effect to Company’s Value: Study in LQ 45 Companies Listed in Indonesia Stock Exchange. Academic Journal of Interdisciplinary Studies, 9(3), 156. https://doi.org/10.36941/ajis-2020-0051

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Section

Research Articles