Abstract
The purpose of this research is to test and analyze the effect of capital structure, company growth, and inflation on firm value with profitability as intervening variable. The population in this research is manufacturing companies listed on the Indonesia Stock Exchange in 2014 - 2018 totaling 174 companies. Determination of the sample is selected by purposive sampling. Out of 174 populations, only 27 samples were selected. The type of research data is panel data. Path analysis was chosen as the method of data analysis. The results shows that partially capital structure has a significant effect on firm value, company growth and inflation have no significant effect on firm value, capital structure has a significant effect on profitability, company growth and inflation have no significant effect on profitability, profitability has a significant effect on firm value. Profitability mediates the effect of capital structure on firm value, profitability does not mediate the effect of company growth and inflation on firm value.
Highlights
A company's main goal is to maximize the company's wealth or value
H1 accepted (Capital Structure has a significant effect on Firm Value) H2 rejected (Company Growth has no significant effect on Firm Value) H3 rejected (Inflation has no significant effect on Firm Value)
H4 accepted (Capital Structure has a significant effect on Profitability)
Summary
A company's main goal is to maximize the company's wealth or value. Reflections on company performance can be known from the firm value. A company must use a combination of capital structure that is appropriate and used optimally in order to achieve higher benefits from the use of debt than the interest expense that must be paid by the company. The problem is, on the IDX there are several Manufacturing Companies which DER is > 1, where normally DER is < 100% or < 1 It means debt is not higher than equity. The results of Andrian's (2012) research, concluded that firm value is significantly affected by capital structure. Safrida's research results (2008), concluded the firm value is not significantly influenced by company growth. Dhani's research results (2017), concluded that firm value is significantly influenced by profitability. Hamidah's research results (2015), concluded the firm value is not significantly influenced by inflation and its direction is negative
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