An Analysis of Factors Affecting the Capital Structure and Return on Shares with Family Ownership as a Moderating Variable (An Empirical Study of Companies that are Listed in the Indonesia Stock Exchange)
22 Pages Posted: 27 Jan 2017
Date Written: December 30, 2016
In doing daily activities of the Company, funding is required to achieve the goals set. This fund may be obtained from internal and external sources. Funds from the internal form of retained earnings and own capital, funds from the external form of a loan from a third party that are both long term and short term, both investment loans and working capital loans. The composition of the debt to equity describes the financial structure, and the composition of long-term debt to equity capital structure illustrates. Financial management seeks to optimize the management of these resources. Capital structure and stock returns are important parts of the analysis of a company’s financial statements. There has been a lot of research conducted on these two components above. But no theory cannot explain which ideal factors that have affect the optimal capital structure and stock return. Therefore, the main objective of this research is to analyze factors affecting the capital structure and return on share. The independent variable in this research are growth, profitability, risk, dividend yield, while family ownership is a moderating variable. Company size is a control variable.
The research is focused on companies listed on Indonesian Stock Exchange for period of 2010- 2012. The data was collected using purposive sampling method. The sample used that meet the qualifications are 378 samples. The statistical method used is multiple regression using SPSS as a tool. The classic assumption tests – normality test, multicolinearity test, heteroscedacity test, autocolinearity test, test of coefficient determination and F-test were done before testing the hypothesis.
The results of the study showed that of the four variables proposed in this research proved the hypothesis which the growth of assets, profitability (ROE), risk and dividend yield, only growth have a positive effect on the capital structure, while profitability and dividend yield variable has a negative effect, while the risk is has not an influence on the capital structure. While on stock returns, only profitability (ROE) have a positive influence, growth, profitability and risk have no effect on stock returns. In this study also shawing from that family ownership as a moderating variable, family ownership only weakened the relation between profitability and capital structure. For the other variables, family ownership did not moderate the relation between each variable and the capital structure as well as stock returns.
Keywords: Capital Structure, Stock Return, Asset Growth, Profitability, Risk, Dividend Yield , Family Ownership and Firm Size
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