Effects of Capital Structure and Profitability on Corporate Value with Company Size as the Moderating Variable of Manufacturing Companies Listed on Indonesia Stock Exchange

Ela Mahdaleta, Iskandar Muda () and Gusnardi Muhammad Nasir

Academic Journal of Economic Studies, 2016, vol. 2, issue 3, 30-43

Abstract: This study aims to determine the effect of capital structure and profitability on the corporate value by company size as the moderating variable on manufacturing companies listed on Indonesia Stock Exchange from 2012 to 2014. Variables used in this research are the Capital Structure and Profitability as independent variables, company size as moderating variable and corporate value as the dependent variable. The corporate value in this study was measured using price to book value. This study was performed on manufacturing companies listed on the Indonesia Stock Exchange. This study was conducted on 46 companies that meet the sampling criteria of 135 companies listed on the Indonesia Stock Exchange. The research data were secondary data from the financial statements of 46 companies published in the Indonesia Stock Exchange. The data processing method in this study used multiple linear regression tests and moderating test using residual test by testing classical assumption test beforehand. The results show independent variables have simultaneous significant influence on the corporate value. Meanwhile, partially, Debt to equity ratio has significant negative effect on corporate value, and Return on assets has significant positive effect on corporate value. The moderating test result shows that company size is unable to partially moderate the relationship of debt to equity ratio on the corporate value, and unable to partially moderate the relationship of return on assets on the corporate value.

Keywords: Capital structure; profitability; company size and corporate value (search for similar items in EconPapers)
JEL-codes: D53 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (27)

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