The Effect of Determinant Capital Structure on Formatting Capital Structure: Empirical Evidence in Indonesian Firms

Malelak, Mariana Ing and Ottemoesoe, Ridhotama Shanti Darsih and Basana, Sautma Ronni (2014) The Effect of Determinant Capital Structure on Formatting Capital Structure: Empirical Evidence in Indonesian Firms. In: Simposium Riset Ekonomi (SIMREK) VI, 28-08-2014 - 28-08-2014, Surabaya - Indonesia.

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Abstract

The Purpose of this research is to test the effect of determinant capital structure (tangibility, profitability, growth opportunity, size and cash holding) on formatting capital structure in Indonesian Firms. This research use financial statement of 125 nonfinancial firms listed in Indonesian Stock Exchange (IDX) period 2000 – 2010 and use multiple regression as an analysis method. The result showed that during the period 2000 – 2010, there were four variables (tangibility, profitability, size and cash holding) had significant effect on formatting capital structure, while growth opportunity had no significant effect . In Overall, all of the independent variables had significant effect on formatting capital structure in Indonesian firms.

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