EFFECT OF CAPITAL STRUCTURE ON RETURN ON EQUITY: A SURVEY ON ISSUERS OF CATEGORIES JII70 OF THE INDONESIA STOCK EXCHANGE

Abstract

The research conducted in this study is the effect of the capital structure on return on equity, the survey was conducted on issuers in the JII70 with a sample of 32 issuers. The data taken are financial report data for 2016 and 2017. Based on the results of data processing with the SPSS version 25, it shows that the capital structure has a positive and significant effect on return on equity. This positive influence shows that effective use of debt will have an impact on return on equity increasing. But this increase in capital structure is a result of debt expansion. Therefore debt needs to be controlled and evaluated so that its use is effective which will ultimately have an impact on return on equity.

Keywords

• Capital structure
• return on equity
• financial report
• survey
• business