Capital Structure Policy Research Articles

Capital Structure and Corporate Governance: Shaping Company Value through Dividends

Background: The dynamic interplay between corporate financial strategies, particularly capital structure and dividend policies, significantly influences firm value in the manufacturing sector.Knowledge Gap: While previous research has explored the direct relationships between capital structure and firm value, less attention has been paid to the moderating effects of dividend policy, profitability, and Good Corporate Governance (GCG) in this context. Aims: This study aims to assess the moderating roles of dividend policy, profitability, and GCG on the relationship between capital structure and firm value. Results: The findings indicate that dividend policy, profitability, and GCG significantly moderate the relationship between capital structure and firm value, suggesting that firms must balance dividend distribution with their capital structure decisions. Novelty: This research contributes to the existing literature by integrating dividend policy and GCG into the analysis of capital structure's effect on firm value, addressing previously overlooked aspects. Implications: The study underscores the importance of prudent dividend policies and robust corporate governance in enhancing firm value, offering valuable insights for managers and investors aiming to optimize financial performance in the competitive food and beverage manufacturing sector. Highlights : Moderating Effects: Dividend policy, profitability, and GCG significantly moderate the relationship between capital structure and firm value. Financial Balance: Firms must balance dividend distribution with capital structure decisions to enhance overall value. Managerial Insights: The findings provide crucial insights for managers and investors to optimize financial performance in the food and beverage sector. Keywords: capital structure, dividend policy, firm value, profitability, Good Corporate Governance

PENGARUH PRUDENCE, PERSISTENSI LABA, STRUKTUR MODAL DAN KEBIJAKAN DEVIDEN TERHADAP KUALITAS LABA

This research aims to provide empirical evidence regarding the influence of Prudence, Earnings Persistence, Capital Structure and Dividend Policy on Earnings Quality. The Quality of Earnings variable is measured by the Quality of Earnings Ratio, Prudence is measured by the KNSV Index, Earnings Persistence is measured by the Profit Persistence Index, Capital Structure is measured by DAR & Dividend Policy is measured by DPR. This type of research is quantitative research with a population of LQ45 companies registered on the IDX for 2018-2022. The sample in this study used a purposive sampling method, obtaining 17 companies. The data analysis technique uses multiple linear regression analysis methods using the Eviews 10 software program. The research results show that Prudence, Profit Persistence, Capital Structure and Dividend Policy simultaneously have a significant effect on Earnings Quality. Prudence partially has no effect on Earnings Quality. Partial Profit Persistence has no effect on Earnings Quality. Capital Structure partially has a significant positive effect on Earnings Quality. Dividend Policy partially has no effect on Earnings Quality.

PENGARUH GROWTH OPPORTUNITY, STRUKTUR MODAL DAN KEBIJAKAN DIVIDEN TERHADAP NILAI PERUSAHAAN (STUDI EMPIRIS PADA PERUSAHAAN SEKTOR KEUANGAN DI BURSA EFEK INDONESIA TAHUN 2018-2022)

This study aims to prove and obtain empirical evidence of the Influence of Growth Opportunity, Capital Structure, and Dividend Policy on Company Value. This study also uses a sample of financial sector companies listed on the Indonesia Stock Exchange for the 2018-2022 period. The data used in this study are secondary data in the form of financial reports and annual reports. The sampling method uses the Purposive Sampling method, where from 97 financial sector companies a sample of 23 companies was obtained for 5 years so that 115 sample data were obtained. The analysis used is Panel Data Regression Analysis using the Random Effect Model (CEM) Regression and the data was processed using Eviews Software version 12. The results obtained show that the Feasibility Test (f test) that Company Value is simultaneously influenced by Growth Opportunity, Capital Structure and Dividend Policy. The results obtained show that the Partial Test (t test) shows that only the Capital Structure variable has a positive and significant effect on Company Value. Meanwhile, the Growth Opportunity variables and Dividend Policy do not have a significant effect on the Company Value variable.

The Influence of Profit Persistence, Capital Structure, and Dividend Policy on Earnings Quality

This research is motivated by the fact that currently profit is very important for investors and other users of financial reports to understand. Quality profits can be used to make the right decisions, therefore profits are still very important to discuss. This study aims to analyze the effect of profit persistence, capital structure, and dividend policy on earnings quality. This type of research is quantitative research with secondary data sources. The population in this study is 75 energy sector companies listed on the Indonesia Stock Exchange in 2018-2022. The sample selection method used in this study is purposive sampling so that the final sample obtained by this method is 14 companies with 5 years of research obtained 70 data. The research results show that simultaneously the variables of profit persistence, capital structure and dividend policy have an effect on earnings quality. Then, partially, the earnings persistence and capital structure variables have no effect on earnings quality. Meanwhile, the dividend policy variable influences earnings quality. Based on the research results, it can be concluded that companies that have increasingly consistent profits and companies that use funds originating from debt will not influence the high or low quality of the profits produced by the company, while companies that have a higher dividend policy will have a higher quality of profits produced by the company.

Pengaruh Profitabilitas, Likuiditas, Stuktur Modal, dan Kebijakan Dividen terhadap Nilai Perusahaan

This study aims to determine the effect to profitability, liquidity, capital structure and dividend policy on company value on in food and beverage sector companies listed on the Indonesia Stock Exchange for the 2019 – 2023 period of 95 companies. The data used in this study were obtained from financial statement data and annual reports. The population in this study are food and beverage sector companies listed on the Indonesia Stock Exchange. The sampling technique used was purposive sampling method and obtained 215 sample data from 43 companies. The analysis technique used in this study is multiple linear regression analysis using the Statistical Package for the Social Sciences (SPSS) version 22. The results of this study indicate that profitability has a positive and significant effect on company value, while liquidity, capital structure and dividend policy have no effect on company value.

Determinan Struktur Modal Perusahaan yang Terdaftar di JII70

Capital structure policy is a core financing decision for a company that affects company value. Companies need to be careful in determining where the source of financing comes from, whether from debt or equity sourced from their own funds or from the issuance of shares. Wrong capital structure policies can lead a company into financial distress and bankruptcy. Over the last five years, more and more companies have obtained financing through the issuance of shares on the sharia stock market. The number of investors investing their funds in this market has also increased. Based on this, the aim of this research is to find out and understand what the factors of company characteristic that effect the capital structure in companies listed on the Jakarta Islamic Index 70 (JII70) during the 2018-2022 period. This study uses a quantitative approach. The model used is dynamic panel data regression with the System-GMM as the analysis method. The data used is secondary data for the 2018-2022 period which comes from company financial reports collected through IDX (Indonesia Stock Exchange). The population in this study were 70 companies registered on JII70. The sampling method was purposive sampling. The number of samples selected was 29 companies. The results of hypothesis testing show that the factors of company characteristic that effect the capital structure are return on equity, profit margin, current ratio, and total asset turnover.

The Effect of Capital Structure On Company Value with Profitability and Dividend Policy as A Mediating Variable

The theory of capital structure with taxes is put forward by stating that the value of a company increases as the total debt increases. The use of debt in the company's capital structure, on the other hand, also incurs costs that can reduce the value of the company, so Modigliani and Miller (1963) the trade-off theory reveals that there is a so-called optimal capital structure. This study aims to test and analyze the influence of capital structure, profitability, and dividend policy on company value, both directly and indirectly. The population of this study is pharmaceutical sub-sector companies listed on the Indonesia Stock Exchange for the period 2008-2022. The sampling technique used was the purposive sampling technique and samples were obtained from 6 companies with a total of 90 years of observation. This study uses secondary data in the form of annual financial statements of pharmaceutical sub-sector companies listed on the Indonesia Stock Exchange for the 2008-2022 period. The data analysis technique in the study uses the dynamic panel method of the system generalized method of moments (GMM) with the Rstudio application. The results of the analysis provide evidence that capital structure, profitability, and dividend policy have a significant positive effect on the company's value. Capital structure has a significant positive effect on profitability and dividend policy. Capital structure affects the value of the company through profitability as a mediating variable. Capital structure affects the value of the company through dividend policy as a mediating variable. Company management is advised to always maintain an optimal capital structure for the company so that it can increase profitability and dividend distribution so as to increase the company's value. For the next researcher, it is recommended to increase the number of research samples so that the research results can be generalized widely.

Company Valuation and Influencing Factors: A Study of Automotive and Component Manufacturers Listed on the Indonesia Stock Exchange

The company's value is crucial as it reflects the company's performance, which can influence investors' perception of the company. The aim of this research is to determine the influence of profitability, company size, liquidity, and managerial ownership on company value in the automotive and component manufacturing sub-sector on the Indonesian Stock Exchange (IDX) for the years 2017-2021. The population in this study consists of manufacturing companies listed on IDX from 2017 to 2021, totaling 13 companies, with a sample size of 12 companies selected through purposive sampling method. This study employed multiple linear regression analysis to investigate the factors influencing company value. The results reveal that profitability and managerial ownership have a positive and significant impact on company value, while company size has no significant effect. Interestingly, liquidity exhibits a negative and significant relationship with company value. These findings suggest potentially important areas for future research. Expanding the study to include additional variables, such as leverage, capital structure, and dividend policies, could provide a more comprehensive understanding of the determinants of company value

Dividend Policy and its Impact on Price: Empirical Insights from Nepalese Life Insurance Companies

This study aims to evaluate the correlation and examine the impact of the explanatory factors, specifically EPS, DPS, PE ratio, management expenses to premium collected, capital to total assets, efficiency ratio, age of firm, and profitability on market price per share. Out of 14 life insurance companies operating in Nepal, 9 companies had been chosen for the study. The ordinary least square (OLS) method is used to examine the effect of predictor variables on MPS. The findings indicate that EPS, DPS, and PE ratios exhibit positive and significant correlations with and influence on share price (MPS). Moreover, this study identifies a detrimental correlation between profitability and MPS. The management expenses, in relation to the premium collected and capital to total assets, exert a detrimental and statistically significant influence on MPS. This study provides evidence in favor of the dividend relevancy theory, as it demonstrates that the dividend per share (DPS), earnings per share (EPS), and price-to-earnings (PE) ratios have a statistically significant and positive influence on the share price, as assessed by the market price per share (MPS). Nevertheless, this analysis challenges the dividend irrelevancy argument by highlighting that a company's market value is determined by its operational income rather than its capital structure or dividend payout policy. Therefore, this research supports the dividend relevancy theory. The findings of this study can be advantageous for investors seeking to enhance their returns and augment their wealth through investments in lucrative areas.

MSMEs Financial Sustainability Model in Indonesia: Policy, Capital, Literacy, Structure

Purpose: This study looks into the intricate relationships that exist between capital structure, financial literacy, intellectual capital, social capital, and government policies in relation to the sustainability and financial performance of MSMEs in Indonesia. Methodology/approach: This study used structural equation modeling (SEM-PLS) for quantitative analysis with a sample of 375 firms. Findings: The findings support the significance of these elements and highlight complex connections that add to a comprehensive knowledge of MSMEs dynamics. Notably, the effects of government policies on sustainability financial and performance are varied. Practical implications: For academics, practitioners, and policymakers seeking to support MSMEs growth and resilience in the particular Indonesian setting, these findings provide practical insights. Originality/value: In doing so, the study aims to elucidate the complex interrelationships among these variables and their collective impact on the operational efficiency and long-term viability of MSMEs in Indonesia.

FAKTOR-FAKTOR YANG MEMPENGARUHI NILAI PERUSAHAAN PADA PERUSAHAAN MANUFAKTUR

This study examines the effect of capital structure, company growth, company size, ownership, and dividend policy on the value of manufacturing companies listed on the Indonesia Stock Exchange in 2018-2020. The use of the purposive sampling method, so as to get 27 selected companies that meet the criteria. Testing the data of this study using the Econometric Views (Eviews) 12.0 program. The results of the study show that capital structure has a positive and significant effect on company value, while company growth, company size, managerial ownership, and dividend policy do not affect company value.

Exploring Corporate Finance Dynamics: A Qualitative Study on Capital Structure, Firm Value, and Dividend Policies

This qualitative study delves into the intricate dynamics of capital structure, firm value, and dividend policies within the realm of corporate finance. The research aims to explore the factors influencing financial decision-making processes and their implications for firm performance and shareholder wealth maximization. Adopting a systematic literature review approach, the study synthesizes existing theoretical frameworks, empirical evidence, and alternative perspectives to provide a comprehensive analysis of the chosen topic. The research methodology involves data collection through academic databases and scholarly sources, followed by thematic analysis to identify recurring themes and patterns in the literature. The findings highlight the multifaceted nature of financial decision-making, challenging traditional theories such as the irrelevance theory and emphasizing the significance of alternative perspectives such as the pecking order theory, signaling hypothesis, and clientele effect. Moreover, empirical evidence suggests nonlinear relationships between capital structure, firm value, and dividend policies, indicating the influence of contextual factors such as industry dynamics, regulatory environments, and market conditions. The implications drawn from this study extend to both academia and practical applications, emphasizing the need for a nuanced understanding of corporate finance dynamics to inform theory, practice, and policy in the field. By embracing interdisciplinary perspectives, methodological pluralism, and a forward-looking orientation, researchers and practitioners can contribute to the continued evolution of corporate finance theory and practice, ultimately driving innovation, efficiency, and sustainability in the corporate sector.

The Effect of Contributed Capital Mix on Dividend Policy: Testing Life Cycle Theory in The Covid-19 Pandemic Era

Objective: This study aims to test whether life cycle theory is relevant in the era of the Covid-19 pandemic crisis. Specifically, whether the contributed capital mix has a significant effect on dividend policy. Theoretical framework: In this study, we tested the life cycle theory and whether it is relevant to the COVID-19 pandemic situation. The dividend policy of a corporation should be determined by where it is in its life cycle. Mature, well-established businesses usually give dividends. Method: We studied 66 companies in the non-cyclical consumer sector listed on the Indonesia Stock Exchange during the pandemic period from 2020 to 2022. The dependent variables used in this study are in the category of dividend payers and non-dividend payers. As for the independent variables, we use the variables return on assets, sales growth, rete, MarCap, Papen, teta, and cash holding. We use the logistic regression method with the data panel. Results and conclusion: It is statistically found that life cycle theory is relevant to some contributed capital mixes such as rete, MarCap, Papen, and cash holding. Meanwhile, ROA, SGR, and teta have no significant effect on dividend policy paying dividends or not but still have a positive relationship direction. Implications of the research: The life cycle hypothesis is being tested in the context of the pandemic era in this investigation. A better knowledge of how company financial decisions are impacted by economic crises may result from the results, regardless of whether they confirm or refute the life cycle theory. In terms of strategic financial planning, the research may provide financial managers with useful advice. It will assist them in understanding how to modify capital structure and dividend policies in response to economic shocks such as the COVID-19 pandemic. Originality/value: Studying Life Cycle Theory in the context of a pandemic enhances the research's theoretical components. It exhibits the willingness to adapt well-established ideas to unusual and intricate circumstances, which may result in a more thorough comprehension of the dynamics underlying corporate financial decisions.

The Effect Of Mergers And Acquisitions On The Financial Performance Of Companies Listed On The Indonesia Stock Exchange

Mergers and acquisitions (M&A) have become a common strategy in business development in today's global market. This study aims to analyze the effect of M&A on the financial performance of companies listed on the Indonesia Stock Exchange (IDX). Data is collected from companies that experienced M&A during a certain period, focusing on financial variables such as profitability, liquidity, leverage, and sales growth. The panel regression analysis method was used to test the research hypothesis. The results show that M&A has a significant influence on the financial performance of companies on the IDX. Specifically, the findings show an increase in profitability and sales growth after M&A, while liquidity tends to decrease in the short term after the transaction. Leverage may also fluctuate depending on the capital structure and financial policies the company implements post-M&A. This study provides valuable insights for stakeholders in the Indonesian capital market, including investors, fund managers, and regulators, to understand the implications of M&A on firms' financial performance. The practical implications of this study can assist firms in planning and evaluating their M&A decisions more carefully to increase firm value and reduce the risks associated with such transactions.

Financial Decisions and Value-at-Risk: Empirical Evidence from BIST 100 Companies

This study examines the relationship between financial decisions and the value-at-risk (VaR) of companies operating in the Turkish stock market. The study contains semi-annual data of non-financial BIST 100 Index companies spanning from January 2010 to June 2023. Companies’ VaR are calculated using Monte-Carlo simulation, bootstrap, delta-normal, and historical simulation methods and included in separate econometric models as dependent variables. Financial decisions are represented through financial ratios in line with the basic principles of corporate finance and included as explanatory variables in econometric models. The study employs a five-stage panel data methodology. 
 Findings reveal that the impact of financial decisions regarding working capital management, capital structure, dividend pay-out, and growth policies on companies’ VaR differ according to the VaR calculation method. Notably, findings show that financial decisions explain the changes in VaR calculated by Bootstrap method with the highest success rate, aligning with existing finance literature. Prudent financing policies and flexible investment strategies in working capital management, enhanced profitability and financial performance, and sales growth exhibit dampening effects on VaR. Conversely, heightened leverage and long-term borrowings, decisions to pay-out dividends, and growth in foreign investments have increasing effects on VaR. Furthermore, the study identifies the Covid-19 pandemic as exerting a negative influence on VaR.

Sustainability Environmental Performance Future Investment for Company Value

This study investigates the financial dynamics of 182 manufacturing companies listed on the Indonesia Stock Exchange during the period 2019 to 2022, amid the COVID-19 pandemic. This study uses a quantitative approach using SPSS for regression analysis. The dataset covers the turbulent years of the COVID-19 pandemic, providing insights into the resilience and adaptability of companies during this period. This study reveals that while capital structure and dividend policy do not significantly affect firm value, firm growth, profitability and investment decisions exert a differential influence. Notably, environmental performance moderates the impact of growth and profitability on firm value, but does not significantly affect relationships involving capital structure, dividend policy, or investment decisions. This research contributes to the growing landscape of financial analysis by incorporating environmental considerations as a moderating factor. It underscores the importance of sustainable practices in improving financial performance and firm value, especially in the context of global crises such as the COVID-19 pandemic.

Determinan Struktur Modal Dengan Ukuran Perusahaan Sebagai Variabel Moderasi

Purpose: This research aims to analyze and test the influence of company growth, business risk, and asset structure on capital structure with company size as a moderating variable. Methodology/Approach: The population used in this research is tourism, restaurant and hotel sector companies that have been listed on the Indonesia Stock Exchange (BEI) in four periods, namely 2018-2021, totaling 31 companies. Findings: The results of this research explain that asset structure has a negative effect on capital structure, while company growth, business risk and company size have no effect on capital structure. Company size cannot moderate the influence of company growth, business risk, and asset structure on capital structure. Practical and Theroretical Contribution/Originality: This research contributes to investors, creditors, company management and researchers to increase understanding regarding the capital structure of tourism, restaurant and hotel sector companies. Capital structure as an independent variable can be used to monitor the company's funding conditions and as a consideration for investors and creditors in providing funding. A poor capital structure can increase financial risk to a company. Investors and creditors need to ensure that the company has an appropriate capital structure policy in handling financial obligations without facing high risks. Research Limitation: The independent variables used in this research were only able to explain 2.82% of the influence on capital structure. The remaining 71.8% is explained by other variables that are not in this study.

Firm Size Sebagai Salah Satu Penentu Firm Performance

This article examines the contribution of firm size as a determinant of firm performance. The novelty of the research is to develop a new model related to the determinants of firm performance, especially the firm size variable. Another novelty in this study is that it is more comprehensive in seeing the effect of investment opportunity set, capital structure, and dividend policy on company performance and dividend policy, as well as company size as a moderating variable. The number of samples is 26 companies with a period of 5 years, 2018-2022. Research hypothesis testing using Structural Equation Model (SEM) based on Partial Least Square (PLS). The results showed that investment opportunity set has a significant effect on dividend policy, capital structure has a significant effect on dividend policy, investment opportunity set has no significant effect on company performance, capital structure has no significant effect on company performance, dividend policy has a significant effect on dividend policy. Dividend policy has a significant effect on firm performance, firm size significantly moderates the effect of investment opportunity set on dividend policy, firm size does not significantly moderate the effect of capital structure on dividend policy, investment opportunity set has a significant effect on firm performance through dividend policy, capital structure has a significant effect on firm performance through dividend policy. Keywords: Investment Opportunity Set, Company Size, Dividend Policy, Company Performance

THE INFLUENCE OF GROWTH OPPORTUNITIES, CAPITAL STRUCTURE, PROFITABILITY, AND DIVIDEND POLICY ON FIRM VALUE (In Pharmaceutical Companies Listed on the Indonesia Stock Exchange 2014-2022)

This research aims to see the influence of growth opportunities, capital structure, profitability and dividend policy on company value. The type and source of research data is quantitative data using financial reports on pharmaceutical companies listed on the IDX for 2014-2022, while the sampling technique uses purposive sampling to obtain 9 pharmaceutical companies that meet the criteria. The method used in this research is multiple linear regression analysis, using the SPSS program to test it. The results show that partially growth opportunities (PER) and profitability (ROA) have a positive and significant effect on company value. Capital Structure (DER) has a negative but significant effect on company value. Dividend Policy (DPR) has a negative and insignificant effect on company value. Meanwhile, simultaneously the results of the F test and the coefficient of determination test show that X1, X2, X3, and X4 have a simultaneous effect on Y.

Corporate tax policy, Shariah compliance and financial decisions: evidence from Malaysia

PurposeThis study investigates the influence of corporate income tax on two corporate financial decisions — dividend and capital structure policies, particularly for Shariah compliant companies in Malaysia.Design/methodology/approachThe study considered data from a sample of 529 Malaysian listed companies from four industrial sectors from 2007–2021 (6,746 company-year observations, before eliminating outliers). Panel models such as Fixed Effect and Random effect models were used. The study specifically tested the effect of corporate income tax on dividend and capital structure policies for Shariah compliant companies (3,148 observations) and controlled for industrial sectors.Findings(1) Firms are mostly Shariah-compliant, less liquid, less profitable and smaller in size, (2) Broadly when analysed together, tax has no impact on debt-equity ratio while it has an impact on dividend per share, (3) However, when tested separately for Shariah compliant companies, the influence of effective tax on capital structure is very evident but not for dividend and (4) influence of industrial sector on the relationship between corporate tax and capital structure and dividend policy is significant. Results indicate that Shariah firms might be raising debt to gain tax advantage. Companies in general pay dividends to avoid reputational damage.Research limitations/implicationsThis study assumes that leverage and dividend policy decisions are the main outcomes of the changing tax policies, while it seems that there could be other important outcomes that can be tested in future research. The study also shows the changing tax regimes of different ASEAN countries but they have not been tested to see the differences between countries. It will be indeed interesting for future researchers to focus on this aspect.Originality/valueThe findings contribute to the literature on tax planning of the Shariah-compliant firms, a high growth business segment in the Asian context. The study discussed potential tax-based Islamic market product development.