OPTIMAL CAPITAL STRUCTURE ANALYSIS TO IMPROVE CREDIT RATING (CASE STUDY: PT AGUNG PODOMORO LAND TBK).
The global economic crisis has substantially reduced corporate earnings in many sectors. It has triggered a credit rating downgrade in response to the harmful effects of business disruptions and economic slowdown in many sectors and regions, one of which is the property sector. Agung Podomoro Lan...
Saved in:
Main Author: | |
---|---|
Format: | Theses |
Language: | Indonesia |
Subjects: | |
Online Access: | https://digilib.itb.ac.id/gdl/view/69682 |
Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
Institution: | Institut Teknologi Bandung |
Language: | Indonesia |
Summary: | The global economic crisis has substantially reduced corporate earnings in many
sectors. It has triggered a credit rating downgrade in response to the harmful effects
of business disruptions and economic slowdown in many sectors and regions, one
of which is the property sector. Agung Podomoro Land, Tbk or APLN is one of the
Indonesian real estate companies facing a credit rating downgrade. In 2021 Moody's
Investors Service downgraded the APLN family of companies to Caa1 from B3.
The credit rating downgrade reflects its reliance on asset sales & external funding
to meet its cash needs. It also shows that its high leverage indicates that APLN's
capital structure is not sustainable.
This study provides alternative solutions for APLN to improve its credit rating and
estimate the company's optimal capital structure. The optimal capital structure is
the best mix of equity & debt financing that maximizes the firm's market value
while minimizing its cost of capital. In the long term, using this method will
increase the value of the company & provide benefits for shareholders. This study
will also provide the financial strategy the company should apply to reach optimal
capital structure in current conditions. |
---|