Firm value is a basis for investors in deciding whether or not to invest in a firm. Therefore, a study on issuer’s strategies to maximize firm value requires special attention, especially in dealing with the Islamic capital market which is growing rapidly from time to time. A particular study is important to be conducted to look at the factors that have a direct or indirect effect on a firm's value, which includes; profitability, capital structure, and dividend policy. The path analysis approach is employed in the current study to reveal the effect of profitability on firm value, both directly and indirectly, with the intermediaries of capital structure and dividend policy. The results of the analysis indicate that profitability has a direct positive and significant effect on firm value and a negative and significant effect on capital structure, while the capital structure has a negative and insignificant effect on firm value. Indirectly, dividend policy moderates and strengthens the effect of profitability on firm value, but on the other hand, the capital structure does not mediate the effect of profitability on firm value. The absence of capital structure role in mediating the relationship between profitability and the firm value indicates that investors can determine the value of the firm directly by simply looking at the level of profitability, regardless of management’s strategy in arranging the capital structure.

alafiyah in East Java. It was a qualitative research with an etnography method conducted in Pesantren Lirboyo, Kediri, in 2012. It focused on the transformation of the kyai’s leadership, educational methods, and institution. Pesantren Lirboyo is one of the pesantren salafiyahs in East Java that exists for more than 100 years. It shows its great ability to survive survive, transform, and grow for a long period of time in which the leadership of the kyai plays a very significant role. Therefore, this pesantren is worth examining. The article argued that the transformation from single into dual, collective leadership in the pesantren has been able to reduce conflicts. The concepts of riḍā, barakah, tawaḍu’ and takḍim has been also encouraging the spirits to develop pesantrenbased model of educationKeywords: Pesantren, Salafiyah, Transformasi, Manajemen Pendidikan