Effect of Growth Opportunity, Corporate Tax, and Profitability toward Value of Firm through Capital Structure (listed Manufacturing Companies of Indonesia)

Abstract

The study aims to determine the Effect of growth opportunity, corporate tax, and profitability on the value of firm through the capital structure as an intervening variable at manufacturing companies in Indonesia Stock Exchange. The sample consists of 32 manufacturing sector companies listed in Indonesia Stock Exchange within 2013–2017. The study results show that growth opportunity and corporate tax have a positive effect on the structure of capital, in contrast to profitability, which affects negatively. Meanwhile, capital structure and profitability have a positive Effect on firm value. On the other hand, growth opportunity and corporate tax have no bearing on company value. Yet, capital structure does not mediate between growth opportunity and corporate tax to the value of firm. Nevertheless capital structure mediates the Effect of profitability on the value of firm.

The Effect of Sales Growth, Profitability, and Company Size on Leverage

“…Sales growth has no positive effect on leverage. The results of this study are consistent with the research of Marfuah and Nurlaela [17], Sekartaji [1], Sudiyatno et al [4], Tripathi [18], and Watiningsih [2], but not consistent with the research of Muslyha and Triani [14], Amarudin et al [15], and Triyono et al [16] which resulted in sales growth having a positive effect on leverage. The results of this study are also inconsistent with research by Fitra and Ashry [12] also Ahmed and Sabah [19] which state that sales growth does not have a negative effect on leverage.…”

“…Research by Muslyha and Triani [14], Amarudin et al [15], and Triyono et al [16] shows that sales growth has a positive effect on leverage (debt to equity ratio). The results of this study contradict the research of Marfuah and Nurlaela [17], Sekartaji [1], Sudiyatno et al [4], Tripathi [18], and Watiningsih [2] who found the results of the absence of a positive effect of sales growth on leverage.…”

Hubungan Antara Cash Conversion Cycle Dan Growth Opportunity Dengan Profitabilitas

“…Selain cash conversion cycle, profitabilitas juga dipengaruhi oleh growth opportunity. Growth opportunity merupakan prospek pertumbuhan yang dapat menjadi indikator kinerja masa depan perusahaan (Amarudin et al, 2019). Growth opportunity menggambarkan pertumbuhan asset (Amarudin et al, 2019).…”

“…Growth opportunity merupakan prospek pertumbuhan yang dapat menjadi indikator kinerja masa depan perusahaan (Amarudin et al, 2019). Growth opportunity menggambarkan pertumbuhan asset (Amarudin et al, 2019). Growth opportunity memiliki pengaruh positif pada profitabilitas (Kebewar, 2012;Quang & Xin, 2014).…”

Effect Of Investment Decision, Capital Structure, Profitability, And Company Size On Company Values

“…Signaling Theory is a theory that describes an action taken by a company's management that instructs investors about how management sees the company's prospects for the future (Bennet et al, 2019;Brigham et al, 1993). According to signaling theory, investment activity, and high-profit income can provide a positive signal about the growth of the company in the future, so that it can increase stock prices which are used as a reflection of company value (Achmad and Amanah, 2014;Amarudin et al, 2019). According to the signaling theory stated in (Noerirarwan et al, 2012), expenditure on investment by company management in the form of asset growth will be able to provide a positive signal about the company's growth in the future.…”