Funds are the main source of the company to support the operational activities. Funds must be
managed properly so that planning can be realized well and as expected. Capital structure is a
combination of internal funds and external funds to meet the expenditure of the company. The next
step is to set a budget cost using the cost of capital weighted average. Capital structure and cost of
capital is an important thing that should be studied both for the company to run safely and achieve the
The purpose of this study was to determine how the relationship between Capital Structure and
Cost of Capital to bankruptcy potential.
The results of this study shows that the capital structure have a significant effect on the cost of
capital. The Capital structure that was determined effectively will affect on the use of the cost of capital.
Keywords: Capital Structure, Cost of Capital, Bankruptcy Prediction