ABSTRACT
Capital structure policy is one of the important decisions for Indonesian listed companies. Two main approaches used in the capital structure policy are the pecking order theory and the trade-off theory. The life cycle stage experienced by a company requires it to adjust its capital structure policy. The purpose of this study is to analyze the effect of the life cycle of the company and other factors, such as profitability, growth opportunities, liquidity, non-debt tax shield, as well as the tangibility on the company’s capital structure level. This study uses secondary data and panel data regression analysis as well as a fixed effect estimation model. The results of this study indicated that the life cycle stage has a negative effect on leverage. Profitability has a positive effect on leverage, growth opportunities have a positive effect on leverage, liquidity has a negative effect on leverage, non-debt tax shield has a negative effect on leverage and tangibility has a positive effect on leverage.
