Analisa Struktur Modal Optimal Pada Industri Rokok di Indonesia

When a company want to expand their business, they will need capital, and this capital could be from debt or self equity. Debt itself has two advantages. First, the interest expense is subject to tax deduction hence it will reduce the final cost. Second, the creditor will receive a fix repayment or interest thus the shareholder don�t have any obligation to share the profit or pay a deviden. In the other hand, debt it self has weakness. First, the higher leverage, the hihger risk may occur and it will end up in higher cost of debt or equity. Second, in the downturn event, when the operating profit is not sufficient to cover the cost of debt, the shareholder will be the one who cover this cost. When the shareholder can�t fulfill this obligation then they will be facing a banckruptcy situation. This research is to figure out the capital structure composition, in the scope of each constrains and advantages, by using WACC model as reference in finding the optimal capital structure in order to maximazing the value of the company. This research is focus in cigarette manufacture company and had been listed in the Indonesia stock exchange. The chosing of this sample based on consideration that the industry had been already in mature stage of the industry life cycle in which they�ve executed the optimum capital structure