Growth Opportunities, Debt policy, and Firm Value Relationship
Keywords:
growth opportunity, Debt policy, Firm Value
Abstract
This research aims to investigate the role of growth opportunities in affecting the relationship of debt policy with firm value. I predict growth opportunities as variables that moderate the relationship of debt policy with the firm value. Sample using sub-sector Various Industries 2016-2019 period, Indonesia Stock Exchange (BEI), Using purposive sampling techniques got 171 samples separated in 93 samples of corporate growth and 78 corporate, not growth. The findings of this study 1) Sales growth is suitable as a proxy for growth opportunities. 2) opportunity growth strengthens the relationship between debt policy and firm value. 3) Corporate that does not grow, debt policies can weaken the firm's value
References
References
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[3] Modigliani F, Miller MH. Income Taxes and the Cost of Capital. Am Econ Rev 1963; 53: 433–443.
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[7] Sari IAGDM. Profitability and liquidity on firm value and capital structure as intervening variable. Int Res J Manag IT Soc Sci 2020; 7: 116–127.
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[12] Dang HN, Vu VTT, Ngo XT, et al. Study the Impact of Growth, Firm Size, Capital Structure, and Profitability on Enterprise Value: Evidence of Enterprises in Vietnam. J Corp Account Financ 2019; 30: 144–160.
[13] Uzliawati L, Yuliana A, Januarsi Y, et al. Optimisation of capital structure and firm value. Eur Res Stud J 2018; 21: 705–713.
[14] Syaifulhaq MDH, Herwany A, Layyinaturrobaniyah. Capital Structure and Firm ’ s Growth in Relations to Firm Value at Oil and Gas Companies Listed in Indonesia Stock Exchange. J Account Audit Bus 2020; 3: 14–28.
[15] Neves ME, Serrasqueiro Z, Dias A, et al. Capital structure decisions in a period of economic intervention: Empirical evidence of Portuguese companies with panel data. Int J Account Inf Manag 2020; 28: 465–495.
[16] Chen K. The Influence of Capital Structure on Company Value with Different Growth Opportunities.
[17] Myint S, Lupi A, Tsomocos DP. How Investment Opportunities Affect Optimal Capital Structure. J Appl Corp Financ 2017; 29: 112–124.
[18] Smith CW, Watts RL. The investment opportunity set and corporate financing, dividend, and compensation policies. J financ econ 1992; 32: 263–292.
[19] de Andrés Alonso P, López Iturriaga FJ, Rodríguez Sanz JA. Financial decisions and growth opportunities: A Spanish firm’s panel data analysis. Appl Financ Econ 2005; 15: 391–407.
[20] Abor J, Bokpin GA. Investment opportunities, corporate finance, and dividend payout policy: Evidence from emerging markets. Stud Econ Financ 2010; 27: 180–194.
[21] Danila N, Noreen U, Azizan NA, et al. Growth Opportunities , Capital Structure and Dividend Policy in Emerging Market : Indonesia Case Study. 2020; 7: 1–8.
[22] Andaswari S, Setyadi D, Paminto A, et al. The company size as a moderating variable for the effect of investment opportunity set, debt policy, profitability, dividend policy and ownership structure on the value of construction companies listed on the Indonesia stock exchange. Int J Sci Technol Res 2019; 8: 2356–2362
[23] Jensen MC, Meckling WH. Theory of the firm: Managerial behavior, agency costs and ownership structure. J financ econ 1976; 3: 305–360.
[24] stephen A.Ross. The Determination of Financial Structure: The Incentive-Signalling Approach. Bell J Econ 1997; 8: 23–40.
[25] Myers SC, Majluf NS. Corporate financing and investment decisions when firms have information that investors do not have. J financ econ 1984; 13: 187–221.
[26] BRIGHAM EF. Brigham, Eugene F._ Houston, Joel F. - Fundamentals of financial management-Cengage Learning (2020).pdf.
[27] Baker M, Wurgler J. Market timing and capital structure. J Finance 2002; 57: 1–32.
[1] Myers SC. Determinants of corporate borrowing. J financ econ 1977; 5: 147–175.
[2] Myers SC, Majluf NS. Corporate financing and investment decisions when firms have information that investors do not have. J financ econ 1984; 13: 187–221.
[3] Modigliani F, Miller MH. Income Taxes and the Cost of Capital. Am Econ Rev 1963; 53: 433–443.
[4] Stiglitz JE. of the Miller Theoremn. Am Econ Rev 1969; 59: 784–793.
[5] NGUYEN NM, TRAN KT. Factors Affecting Capital Structure of Listed Construction Companies on Hanoi Stock Exchange. J Asian Financ Econ Bus 2020; 7: 689–698.
[6] Kakilli AS. The determinants of capital structure: Evidence from the Turkish manufacturing sector. Int J Econ Financ Issues 2015; 5: 158–171.
[7] Sari IAGDM. Profitability and liquidity on firm value and capital structure as intervening variable. Int Res J Manag IT Soc Sci 2020; 7: 116–127.
[8] Dinh HT, Pham CD. The effect of capital structure on financial performance of Vietnamese listing pharmaceutical enterprises. J Asian Financ Econ Bus 2020; 7: 329–340.
[9] Berdiani RA, Lestariningsih M. Pengaruh Struktur Modal, Investment Opportunity Set, Firm Size Terhadap Nilai Perusahaan. J Ilmu dan …, http://jurnalmahasiswa.stiesia.ac.id/index.php/jirm/article/view/976 (2018).
[10] Mindayani R, Banani A, Laksana RD. … the Effect of Capital Structure, Institutional Ownership, Growth Firm, Risk Business on Firm Performance in Manufacturing Firm …. Icore, http://jp.feb.unsoed.ac.id/index.php/Icore/article/view/1737 (2020).
[11] Aggarwal D, Padhan PC. Impact of Capital Structure on Firm Value: Evidence from Indian Hospitality Industry. Theor Econ Lett 2017; 07: 982–1000.
[12] Dang HN, Vu VTT, Ngo XT, et al. Study the Impact of Growth, Firm Size, Capital Structure, and Profitability on Enterprise Value: Evidence of Enterprises in Vietnam. J Corp Account Financ 2019; 30: 144–160.
[13] Uzliawati L, Yuliana A, Januarsi Y, et al. Optimisation of capital structure and firm value. Eur Res Stud J 2018; 21: 705–713.
[14] Syaifulhaq MDH, Herwany A, Layyinaturrobaniyah. Capital Structure and Firm ’ s Growth in Relations to Firm Value at Oil and Gas Companies Listed in Indonesia Stock Exchange. J Account Audit Bus 2020; 3: 14–28.
[15] Neves ME, Serrasqueiro Z, Dias A, et al. Capital structure decisions in a period of economic intervention: Empirical evidence of Portuguese companies with panel data. Int J Account Inf Manag 2020; 28: 465–495.
[16] Chen K. The Influence of Capital Structure on Company Value with Different Growth Opportunities.
[17] Myint S, Lupi A, Tsomocos DP. How Investment Opportunities Affect Optimal Capital Structure. J Appl Corp Financ 2017; 29: 112–124.
[18] Smith CW, Watts RL. The investment opportunity set and corporate financing, dividend, and compensation policies. J financ econ 1992; 32: 263–292.
[19] de Andrés Alonso P, López Iturriaga FJ, Rodríguez Sanz JA. Financial decisions and growth opportunities: A Spanish firm’s panel data analysis. Appl Financ Econ 2005; 15: 391–407.
[20] Abor J, Bokpin GA. Investment opportunities, corporate finance, and dividend payout policy: Evidence from emerging markets. Stud Econ Financ 2010; 27: 180–194.
[21] Danila N, Noreen U, Azizan NA, et al. Growth Opportunities , Capital Structure and Dividend Policy in Emerging Market : Indonesia Case Study. 2020; 7: 1–8.
[22] Andaswari S, Setyadi D, Paminto A, et al. The company size as a moderating variable for the effect of investment opportunity set, debt policy, profitability, dividend policy and ownership structure on the value of construction companies listed on the Indonesia stock exchange. Int J Sci Technol Res 2019; 8: 2356–2362
[23] Jensen MC, Meckling WH. Theory of the firm: Managerial behavior, agency costs and ownership structure. J financ econ 1976; 3: 305–360.
[24] stephen A.Ross. The Determination of Financial Structure: The Incentive-Signalling Approach. Bell J Econ 1997; 8: 23–40.
[25] Myers SC, Majluf NS. Corporate financing and investment decisions when firms have information that investors do not have. J financ econ 1984; 13: 187–221.
[26] BRIGHAM EF. Brigham, Eugene F._ Houston, Joel F. - Fundamentals of financial management-Cengage Learning (2020).pdf.
[27] Baker M, Wurgler J. Market timing and capital structure. J Finance 2002; 57: 1–32.
Published
2022-03-30
How to Cite
Subagyo, subagyo. (2022). Growth Opportunities, Debt policy, and Firm Value Relationship . Kompak :Jurnal Ilmiah Komputerisasi Akuntansi , 13(2), 167 - 174. https://doi.org/10.51903/kompak.v13i2.697
Section
Articles
