THE IMPACT OF MANAGERIAL AND INSTITUTIONAL OWNERSHIP, INTEREST COVERAGE RATIO, AND FIRM SIZE ON COST OF DEBT

Abstract

This study is conducted to analyze probable factors that can influence cost of debt. To do that, the researcher would like to find out the direction and significance of relationships between managerial ownership, institutional ownership, interest coverage ratio, size of firm, bond rating and cost of debt. The data population is non-financial firms in Indonesia which are listed on Indonesia Stock Exchange for the period 2014-2018. This study uses panel data regression to test the hypotheses. The findings of this study show that managerial ownership has positive significant effect, institutional ownership has no significant effect, interest coverage ratio has negative significant effect, and size of firm negative significant effect towards cost of debt. This research also found that bond rating has no significant effect when moderates the relationship between managerial and institutional ownership to cost of debt.