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Reply from Dr. Riskin Hidayat
2024.11.05 13:56:35
The results of this study suggest that high-value firms utilize debt in different ways
compared to low-value firms in an effort to increase their value. High-value firms
tend to use debt as an instrument to expand investment capacity and improve
operations, hoping to generate higher returns. They have better access to financing
sources and can often obtain debt at a lower cost, allowing them to utilize financial
leverage efficiently. In contrast, low-value firms are more likely to use debt to
improve liquidity and meet short-term obligations, without a strong focus on long-
term expansion. This indicates that low-value firms may be more cautious in their
use of debt, given the greater risks associated with their revenue uncertainty. As
such, high-value firms may adopt a more aggressive debt strategy to increase their
value, while low-value firms tend to use debt as a tool for financial stabilization,
which may limit their value growth potential.
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