The Reciprocal Influence of the Capital Structure with the Corporate Value (Study on listed Consumption companies in Indonesia Stock Exchange 2009-2013)

Abstract

This study aims to test and explain: The influence of capital structure on Corporate Value on a reciprocal basis. Population in this research is Consumption company listed on Indonesia Stock Exchange in period 2009-2013 as many as 36 company. The method of determining the sample by using purposive sampling, the sample in this study as many as 20 companies. Data analysis used Generalized Structured Component Analysis (GSCA). Indicators of variables Capital structure consists of: Debt to Asset Ratio (DAR), Debt Equity Ratio and Short Term Debt to Total Assets (STDA). Indicator variable Company value consists of Price Earning Ratio (PER), Price Book Value (PBV) and Closing Price (CP). The results showed that the capital structure had a significant positive effect on company value. It can be interpreted that the debt taken by the Consumption company has not reached the optimum point so that every addition of debt will increase the value of the company (trade off theory Modigliani and Miller, 1963). The results of the reciprocal analysis of the firm's value influence on capital structure is a positive significance, it can be interpreted that the company Consumption in good condition, is a signal for creditors, so the company has the ease to take the debt if it is felt fulfillment of funding with insufficient internal funds

Keywords: Capital Structure, Corporate Value.