THE EFFECT OF CAPITAL STRUCTURE AND COMPANY GROWTH ON THE COMPANY'S VALUE ASTRA INTERNASIONAL 2014-2023

Abstract

This study aims to analyze the effect of capital structure and firm growth on firm value at PT Astra International during the period 2014 –2023. The research employs a quantitative approach using multiple linear regression analysis based on secondary data obtained from the company’s annual financial reports. The results show that both capital structure and firm growth have a positive and significant effect on firm value as measured by the Price to Book Value (PBV) ratio. The coefficient of determination (R²) of 0.792 indicates that 79.2% of the variation in firm value can be explained by the two independent variables, while the remaining 20.8% is influenced by other factors not included in the model. These findings support the Modigliani and Mille r theory, emphasizing that optimal capital structure and consistent firm growth play crucial roles in enhancing firm value. The study contributes to corporate finance literature and provides practical insights for management in determining effective funding and growth strategies to strengthen long - term firm performance.