EFFECT OF MANAGERIAL OWNERSHIP, FREE CASH FLOW AND SIZE COMPANY POLICY ON DEBT (Empirical Study On Industrial Enterprises Basic And Chemicals Listed In BEI)

Abstract

The purpose of this study was to obtain empirical evidence about the effect of managerial ownership structure, free cash flow and the size of the company's debt policy the Basic Industry and Chemicals companies listed on the Stock Exchange.The population in this research is the basic chemical sector companies listed on the Indonesia Stock Exchange during the last three years, is from the years 2009-2011, amounting to 43 companies, using purposive sampling and the sampling results obtained by 37 companies sampled. The variables in this study there are two independent variables consisting of managerial ownership and free cash flow and firm size. As for the dependent variable is debt policy.This has the meaning that the higher the level of managerial ownership of a company, the lower the debt-to-equity ratio. Free Cash Flow positive effect debt policy (debt to equity ratio) at the 5% significance level. This has the meaning that the greater the value of free cash flow the higher the value of the debt to equity ratio and vice versa. Variable positive effect of firm size kebijakan debt (debt to equity ratio) at 95% confidence level. This indicates that the greater the size of the company it will be the higher value of debt-to-equity ratio (DER). Managerial ownership, free cash flow, and firm size simultaneously policy significant effect on debt (debt to equity ratio) at 95% confidence level.

Keywords: Debt Policy, Managerial Ownership and Free Cash Flow, Company Size