The Effect of Capital Structure on Profitability and Stock Returns

Agustinus Kris Bayuarditama (), Ratih Kusumawardhani and Pristin Prima Sari
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Agustinus Kris Bayuarditama: Sarjanawiyata Tamansiswa University, Faculty of Economics
Ratih Kusumawardhani: Sarjanawiyata Tamansiswa University, Faculty of Economics
Pristin Prima Sari: Sarjanawiyata Tamansiswa University, Faculty of Economics

A chapter in Proceedings of the 2nd International Conference on Management and Business (ICOMB 2023), 2024, pp 125-138 from Springer

Abstract: Abstract This study looks at the connection between capital structure, profitability, and stock returns. along with the factors influencing each of these three variables separately. The exogenous variables in this study include business size, asset growth, tangibility, and liquidity, whereas the capital structure, profitability, and endogenous variables are stock returns. Businesses in the food and beverage sector that are listed on the IDX for the 2019–2021 fiscal year make up the population. period; 21 businesses are chosen as a sample. The analytical unit is made up of 63 data points. Using SPSS 24, path analysis is the data analysis method that is employed. The study’s findings show that capital structure is highly influenced by the following variables: company size, growth, tangibility, and liquidity of assets. Profitability is greatly influenced by a number of factors, such as capital structure, asset growth, and business size. The size of the company, capital structure, and asset growth all significantly affect stock returns.

Keywords: Capital Structure; Profitability; Stock Return; Company Size; Asset Growth; Tangibility; Liquidity (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-402-0_15

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