Research Hypothesis H 1 Capital Structure Debt to Equity Ratio DER has an

Research hypothesis h 1 capital structure debt to

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Research Hypothesis H 1 : Capital Structure (Debt to Equity Ratio/ DER) has an effect on Company Value . H 2 : Institutional Ownership has an effect on Company Value. H 3 : Managerial Ownership has an effect on Company Value. H 4 : Profitability (Return on Equity / ROE) has an effect on Company Value. Figure 1 Framework 3. RESEARCH METHOD This research is a quantitative research with hypothesis testing to find out the relationship between two or more variables (Sugiyono, 2010: 100). Research hypothesis testing is a testing that explains a statement that needs to be proven. Research hypothesis testing was done using causal research. Causal research is research that states that a dependent variable is influenced by independent variables. The dimension of research time used is the time specified. This can be seen from the data used in this study, that is, various industrial sector manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2014-2017. This research involves only one object that is, manufacturing companies listed on the Indonesia Stock Exchange (IDX) period 2014- 2017. I(t used a purposive sampling method. The research is included in a descriptive statistical analysis, classic assumption test, and hypothesis test. The hypothesis test was done using multiple linear regression analysis. The data were collected from the official website of the Indonesia Stock Exchange (IDX), www. idx.co.id. The dependent variable is Company Value (Price to Book Value / PBV), while the independent variables are Capital Structure (Debt to Equity Ratio / DER), Institutional Ownership (IO), Managerial Ownership (MO), and Profitability (Return on Equity / ROE). Company Value (PBV) Price to Book Value (PBV) is one measurement that can be used to measure company value. This calculation can be used by investors to find out the market value of a company’s stock (Brigham & Houston, 2012: 151). Price to Book Value (PBV) used in this study refers to research conducted by I Nyoman Agus Suwardika and I Ketut Mustanda (2017) with the following formula: Price per Share PBV = x 100% Book Value per Share Capital Structure (DER) Debt to Equity Ratio (DER) is a tool used to find out the corporate funds which are used as collateral for liabilities (Kasmir, 2013: 158). The Debt to Equity Ratio (DER) used in this study refers to research conducted by I Nyoman Agus Suwardika and I Ketut Mustanda (2017) with the following formula: Total Debt DER = x 100% Total Capital Institutional Ownership (IO) The institutional ownership used in this study refers to the research conducted by Ni Putu Wida P. D. and I Wayan Suartana (2014) with the following formula: Share Ownership by Institution IO = x 100% Outstanding share Managerial Ownership (MO) Managerial ownership is a share ownership by management who actively participates in corporate decision making (Alfinur, 2015). The managerial ownership used in this study refers to the research conducted by Ni Putu Wida P. D. and I Wayan Suwartana (2014) with the following formula: Share ownership by management MO = x 100% Outstanding Share
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32 Jhonatan Trafalgar Purba & Laely Aghe Africa , The effect of capital structure Profitability (ROE)
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