PT XYZ is one of the biggest construction companies in Indonesia. Currently, PT XYZ only had a total amount of cash for 1,213 trillion IDR. It is not enough to pay the bond obligation that is due in September 2021 with the amount of 1,661 trillion IDR. Currently, PT XYZ (PERSERO) Tbk. has a Debt to Equity ratio of 339%, while based on the annual report of PT XYZ, the stock and debt holders of PT XYZ (PERSERO) Tbk. require PT XYZ (PERSERO) Tbk. to have a debt-to-equity ratio below 300%. To solve both problems above, PT XYZ needs to refinance their capital structure, in order to get the lowest cost of capital of funds that will be used to seek source of funding to pay the bonds obligation, also to fulfill the contract requirements with the debtholders. This research will use weighted average cost of capital (WACC) method, the cost of debt method that will be used is Damodaran (2020) model and the cost of equity method that will be used is capital asset pricing model (CAPM). The result of this paper is PT XYZ needs to decrease their debt level to 18%. Keywords: Optimal Capital Structure; Weighted Average Cost of Capital; Debt and Equity Ratio; Constructio
