Relationship of Corporate Growth, Capital Structure, and Company Value: Test of The Significance of Profitability as a Mediation Factor

Abstract

The goal of this research is to look into the effects of growth and capital composition on company value, as well as profitability as an influencing factor. During the period 2011-2017, there were 44 companies listed in IDX. A purposive sampling strategy was used to choose 17 companies. The data was examined using the SPSS ver. 20 program and the intervening regression and path analysis methods. The study employed the Sobel test to examine whether the interaction effect had a significant effect. The analysis indicated that growth and profitability have a substantial impact on company value, while the capital structure has a negative non-significant effect on profitability and has a positive non-significant effect on the value. Growth has a positive substantial impact on profitability, while asset base has a negative net effect on profitability, according to the findings of the study. Profitability had a mediation role in the relationship between growth and company value, according to the findings. On the other hand, the findings revealed that profitability had no impact on the link between capital structure and business value.