DETERMINING THE OPTIMAL CAPITAL STRUCTURE OF PT BALI TOWERINDO SENTRA

• Main Author: Linzai, Nova
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/42732
• Institution: Institut Teknologi Bandung

The increasing number of smartphone user, wider penetration of internet using a mobile device and mobile data consumption lead to rapid growth in the telecommunication industry. It is a promising market prospect for tower telecommunication business in order to fulfill the telecommunication service provider’s company to support its service and infrastructure. The growth of telecommunication service user gives a significant impact on the company’s business to maintain its competitive advantage. Unfortunately, the net profit from PT Bali Towerindo Sentra is lower than companies in the same industry. In order to increase the profit, PT Bali Towerindo has to expand the business and it is important to match the asset being financed. Therefore, determine the optimal capital structure is crucial to maximizing the firm value. To answer the business issue, there are two analyses that been used, external analysis and internal analysis. The external analysis consists of PESTEL and Porter Five Forces analysis and internal analysis consist of the DuPont system and other financial ratios. Based on business issue analysis, it is found that the debt is low related to the average industry; however, the interest coverage ratio is higher than the average industry. The simulation for finding the optimal debt ratio using the year 2018 and 2019 with the cost of capital approach. The optimal debt ratio is when the cost of capital is the lowest firm value in the highest. Based on the calculation of optimal capital structure, it can be concluded that the capital structure in 2018 is 50.73% and the optimal is 40%. The estimated capital structure in 2019 is 52.11% and the optimal is 40%. In order to achieve the optimal debt ratio, it needs to find the lowest cost of capital so that the firm value will be maximized. By decreasing the debt ratio in 2018 the firm value can increase by Rp132,923 million and in 2019 firm value can increase by Rp167,604 million.