THE IMPACT OF CAPITAL STRUCTURE ON COMPANY VALUE AND THE MODERATING ROLE OF THE BOARD
Abstract: This study examines the effect of leverage, board size, firm size, growth, asset structure, profitability, and firm age on firm value, using Tobin’s Q as a proxy. Furthermore, this study explores the role of board size as a moderating variable in the relationship between leverage and firm value. Control variables such as company size, growth, fixed asset ratio, Return on Total Assets, and company age are added in this study. Based on 128 financial report data of public companies listed on the Indonesia Stock Exchange from 2021 to 2024, and using panel data regression with a Fixed Effects Model, the results show that leverage has a significant negative impact on firm value. Although board size does not directly affect firm value, board size serves as a key moderating variable that reduces the negative impact of leverage on firm value. These findings highlight the important role of corporate governance in mitigating financial risks associated with capital structure.
Keywords: Capital Structure, Leverage, Tobin’s Q, Board Size