Abstract
This study aims to determine the effect of debt policy and profitability on firm value moderated by corporate governance. This study uses secondary data on manufacturing companies listed on the Indonesia Stock Exchange for a five-year period from 2016 to 2020. The sample selection used the purposive sampling method in order to obtain a total of 195 samples that met the specified criteria. This research was tested using Moderated Regression Analysis. The results of this study provide evidence that debt and profitability policies have a positive effect on firm value. Corporate is unable to influence the policy of debt to the value of the company, meaning that corporate governance cannot parse the information asymmetry caused by the policy of debt to corporate value and corporate governance strengthen the influence of profitability on firm value, which means that with the increasing corporate governance can strengthen the effect of profitability on firm value.
Highlights
Company value is an illustration from an investor's point of view on the level of success of a company in managing resources at the end of the current year which can be seen in the company's stock price
This study aims to examine the effect of debt policy and profitability on firm value with corporate governance as a moderating variable
Based on the results of research and discussions that have been carried out regarding the effect of debt policy, profitability, firm value and the influence of corporate governance on manufacturing companies in Indonesia
Summary
Company value is an illustration from an investor's point of view on the level of success of a company in managing resources at the end of the current year which can be seen in the company's stock price. The company's value can be measured by the price to book value (PBV), the price earnings ratio (PER) and Tobin'sQ.The main goal of a company is to achieve maximum profit. To achieve this goal, company owners usually entrust the management of the company to highly competent managers (Widyati, 2013). Jensen and Mecling (1976) suggest that when there is a conflict of interest, managers tend to push their utility at the expense of the owners of the company. To oversee issues related to agency, it is very necessary to have an internal mechanism for corporate governance
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