THE IMPACT OF PROFITABILITY, ACTIVITY STRUCTURE, AND BUSINESS RISK TO CAPITAL STRUCTURE (Study of the Building Construction Sub Sector Listed on the Indonesia Stock Exchange Period 2014-2018)

Abstract

The purpose of this study is to study whether there is a significant effect of profitability, asset structure, and business risk on capital structure. Capital structure is an important issue for companies because capital structure will have a direct effect on the company's financial condition. The use of debts by companies can incur interest costs which can make risk the company's payments being unstable. Therefore, a policy is needed in determining the fulfillment of capital needs. The research period used was 2014-2018. This type of research is explanatory research with quantitative research methods. The population in this study are all Building Construction subsector companies listed on the IDX. While the sample of this study was determined by the purposive sampling method. Data collection techniques used are documentation studies and library research. Data analysis techniques used are panel data regression, classic assumption tests, F test and t test. The results showed that the Asset Structure proved to be significant towards the Capital Structure. While Profitability and Business Risk does not affect the Capital Structure.