THE EFFECT OF GROWTH OPPORTUNITY, PROFITABILITY, FIRM SIZE, TANGIBLE ASSETS ON THE OPTIMAL CAPITAL STRUCTURE IN LQ 45 COMPANY LISTED IN INDONESIA STOCK EXCHANGE YEAR 2012 - 2017

Fodju, Elvera Meliana (2018) THE EFFECT OF GROWTH OPPORTUNITY, PROFITABILITY, FIRM SIZE, TANGIBLE ASSETS ON THE OPTIMAL CAPITAL STRUCTURE IN LQ 45 COMPANY LISTED IN INDONESIA STOCK EXCHANGE YEAR 2012 - 2017. S1 thesis, UAJY.

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Abstract

The policy of capital funding or capital structure is one of the highly important policies for a company (Elim and Yusfarita, 2010). The capital structure decision centers on the allocation between debt and equity in financing the company (Rizov, 2011). The decision to select the company funding often presents dilemma for the financial managers. The dilemma is that the managers should be able to gather the fund, both the internal one and the external one, efficiently in a sense that the funding decision should be able to minimize the capital cost. The capital cost that has been resulted from the funding decision is a consequence that arises from the decision that the managers take. The inaccurate funding decision will cause the occurrence of fixed cost in the form of high capital cost, which then might result in the low company profitability (Nurrohim, 2008). This research was conducted for the purpose of empirically test, the influence of the growth opportunity toward the optimal capital structure, to empirically test the influence of the profitability toward the optimal capital structure, to empirically test the influence of the firm size toward the optimal capital structure dan to empirically test the influence of tangible asset toward the optimal capital structure. This research was conducted on the company listed in LQ 45 year 2012 – 2017. The results of this study show that growth opportunities does not effect the optimal capital structure, ROA and PM has a negative effect on optimal capital structure, TAR has a negative effect on optimal capital structure and tangible assets has positive effect on optimal capital structure.

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