DETERMINING THE OPTIMAL CAPITAL STRUCTURE OF PT. XYZ TBK. FOR SUPPORTING GROWTH AND MAXIMIZING THE VALUE OF FIRM AND SHAREHOLDERS

• Main Author: Fakhri, Rafid
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/67982
• Institution: Institut Teknologi Bandung

Capital structure determination is a financial decision that influences the rate of return on the company's investments. Utilizing an efficient capital structure will raise the company's value and deliver shareholder rewards over the long run. PT. XYZ, which was established in 1950, is one of the largest airlines in Indonesia and has utilization-diversified assets. PT. XYZ's ability to evaluate the appropriate capital structure for the company, given its current position, is facilitated by the existence of a lengthy operational data history. Large corporate debt is a result of the firm's high operational expenditures, and company debt is also used to increase the company's fixed assets, which are also financed by company debt. Although the company's capital is insufficient to finance its operational activities. As a result, it is vital to optimize the capital structure in order to detect concerns and adopt new financial actions to lower the value of debt and grow the business. Using Aswath Darmodaran's technique, this study assesses the capital structure and compares it to the ideal capital structure. This research utilizes a simulated cost of capital technique with variable debt levels. PT.XYZ's company value will be increased by analyzing the company's increase in debt and determining the appropriate capital structure to achieve this. The purpose of this research is to examine the company's finances by comparing financial ratios, calculating the hurdle rate, and determining the Optimal Financing Mix.