Author(s): Jaelani La Masidonda, Jantje E. Lekatompessy, Paul Usmany, Djumadi Djunaidy, Sitti Nurjana Batjo, Dwi Hariyanti
This study aims to expand the research of Bhagat & Bolton in 2010 by explaining relation of the effect of CEO capability, CEO share and internal factors on value of firm through structure of capital. This study also reveals a different approach from previous studies, namely a quantitative approach and interviews to facilitate researchers to provide additional explanations for the quantitative findings. The research object is manufacturing firms listed on the Indonesian Stock Exchange (IDX) for the 2016-2020 periods. The population is 202 firms. The analysis tool is Partial Least Square (PLS) facilitated by SmartPLS Software. The results showed that the CEO's ability cannot determine the structure of capital, while the CEO's ownership and internal factors can determine the structure of capital. Regarding the indirect effect of CEO capability, CEO share and internal factors on value of firm through structure of capital, only internal factors determine the value of firm, while CEO capability and CEO share cannot determine the structure of capital. The debt usage in the structure of capital can increase the value of firm.