Optimal Capital Structure to Increase Indonesia Firm Value

This study aimed to determine the construction firms' optimal capital structure compared to the sub-sector industry in the Indonesia Stock Exchange (IDX).The population comprised ten issuers of the construction sub-sector in IDX with quarterly data from June 2013 to December 2020.The data were analyzed using static panel data with three independent variables moderated by ownership of state-and non-stateowned companies.Furthermore, three macro and two dummy variables for infrastructure policy and the Covid-19 pandemic were used.The results showed that company value is significantly influenced by optimal capital structure, profitability, tangibility, infrastructure budget, interest and exchange rates, infrastructure policy, and the pandemic.The construction companies' optimal capital structure was 4.8 times the industry's DER.Each construction company's capital structure was lower than the industry's optimal firm value.Therefore, construction companies should optimize their capital structure to achieve optimal firm value.