The Effect of Profitability, Leverage, Company Size, Managerial Ownership, and Board Gender Diversity on Debt Costs in Companies in the Consumer Cyclical Sector in Indonesia for the 2021-2024 Period

Yemima Kurnia Lipur; Trias Madanika Kusumaningrum

Authors

Yemima Kurnia Lipur Universitas Negeri Surabaya Author
Trias Madanika Kusumaningrum Universitas Negeri Surabaya Author

Keywords:

Cost of Debt, Profitability, Leverage, Firm Size, Managerial Ownership, Board Gender Diversity

Abstract

The cost of debt is one of the key factors influencing corporate financing decisions; therefore, it is important to analyze the determinants that affect it. This study aims to examine the impact of profitability, leverage, firm size, managerial ownership, and board gender diversity on the cost of debt among Consumer Cyclical companies in Indonesia during the period 2021–2024. A quantitative approach was employed using panel data regression with the Random Effect Model (REM). Secondary data were obtained from published financial statements and annual reports. The sample was determined using purposive sampling, resulting in 68 companies with a total of 272 observations. Data analysis was conducted using STATA 17 software. The findings reveal that profitability has a significant negative effect on the cost of debt, while leverage, firm size, managerial ownership, and board gender diversity show no significant influence. The study concludes that a company’s ability to generate profits is a more decisive factor in determining the cost of debt compared to capital structure characteristics, firm size, or corporate governance mechanisms examined. Future research is recommended to consider additional variables and extend the observation period to obtain more comprehensive results.

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