Capital structure and corporate performance

Capital structure and corporate performance

The objective of the current research is to investigate the effect of capital structure on corporate performance using 40 Malaysian listed companies during 2001-2008. Panel data analysis is used to investigate the relations between five measures of capital structure and corporate performance. Using various measurements of corporate performance, the results of this study suggest that firm’s capital structure has a significant negative impact on the firm’s accounting performance which indicates that agency cost problem can affect Malaysian companies followed by high debt policies, consequently resulting in lower firm performance. However, results also suggest that all capital structure ratios except short-term debt ratio have significant positive influence on market performance measurements, which indicates that capital structure and firm performance depend on rising share prices that affect positively on firm’s market performance ratio. The main value of this study is the analysis of the impact of various capital structure measures on corporate performance of Malaysian companies.

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Capital Structure: Evidence from Nigerian Stock Exchange

Capital Structure: Evidence from Nigerian Stock Exchange

This paper examines the effects of capital structure on performance of quoted non-financial firms in Nigeria between 1996 and 2012. The study employed both the first and second generation econometrics method of panel unit root test, principal component analysis, and Generalized Method of Moments. Using return on assets, returns on equity, price earnings ratio, Tobin’s Q, and constructed Performance Index as measures of firm performance and debt ratio as a measure of capital structure. Our result showed that capital structure has a negative and significant relationship with firm performance. The study concluded that the agency costs of the non-financial firms under the Nigerian Stock Exchange are very high and these lead to negative performance.

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Capital Structure of Companies in Ghana

Capital Structure of Companies in Ghana

One of the main factors subject to intense debate in capital structure studies is whether to use the market value or the book value of debt and equity as the correct measure of leverage (Salehi, 2009). Various arguments have been raised in favour of which of the measures to be used in capital structure analysis. However, much has not been done to determine which of the measures has a more significant relationship with financial performance. The purpose of this paper was to demonstrate and recognize the link between capital structure measures and financial performance and to determine which of the capital structure measures has a more significant relationship with performance. Many measures of firm performance were negatively correlated with financial leverage. Meaning, companies that have high profitability and good performance in Ghana have less debt in their capital structure. The study demonstrated that the market value of capital structure has a stronger link with financial performance as compared to the book value. The market value should therefore be taken more into consideration in capital structure analysis. This finding agrees with the empirical work of Salehi (2009).

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CAPITAL STRUCTURE AND PERFORMANCE OF BANKS IN GHANA

CAPITAL STRUCTURE AND PERFORMANCE OF BANKS IN GHANA

Subsequent to the seminal work by Modigliani and Miller, a lot of researchers have revealed that capital structure, generally, has an effect on firm performance, even though the direction of this effect is largely contended. Unfortunately, however, most of these findings are based on data from non-financial institutions. This study is on the relationship between capital structure and performance of banks in Ghana. Panel data from all banks in Ghana for the ten-year period (1999-2008) was used in the analysis. Using data from Bank of Ghana and a modified model by Berger and di Patti (2002), the study presents very key interesting results on capital Structure theory. It is expected that these results would contribute in no small way towards solving the capital structure puzzle and also provide direction for policy makers.

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The Effect of Capital Structure on Firms' Profitability

The Effect of Capital Structure on Firms' Profitability

This book aims to investigate the effect of capital structure on firms’ profitability with special emphasis on Ethiopian large private manufacturing firms. This book contributes a piece of empirical evidence for a theory of capital structure, in Ethiopian context. The decision regarding firm’s capital structure choice is an important issue for financial managers, because it is very much influential on the firm’s profitability and value. In today’s dynamic business world, for a sound operation the companies, financial managers’ decision regarding capital structure should have to have a greater consideration on searching of its optimum level. In general, the firm’s capital structure decision affects the two major objectives of financial management, i.e. firm’s profit maximization and shareholders’ wealth maximization.

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Cost of Capital and Performance(Relationship Study of Indian Company)

Cost of Capital and Performance(Relationship Study of Indian Company)

Finance is the lifeblood of the business. It is well known that finance is required besides the requirement of fixed and working capital for undertaking the program of extension, reorganization or expansion. Now a day market is open and finance are raising through issue of shares, debenture/bond from domestic as well as international capital market in the form of GDR ADR and FCCB and from the wide range of financial institutions. But, the finance is not free of cost. The suppliers of various sources of funds have a charge on the income of organization and this charge on each source capital is known as cost of capital. The present study focused on whether cost of capital has any relationship with financial performance of companies like capital structure.

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Governance issues, corporate financing, and financial performance

Governance issues, corporate financing, and financial performance

This book is about the relationship of corporate governance, corporate financing and financial performance. it elaborate in detail how corporate governance affects the corporate financing patterns which further impact the financial performance of the firms. In directly, corporate governance have large impact on the financial performance. Data have been taken of 170 firm operating in the non-financial sector of Pakistan.

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The Effect of Intellectual Capital on Firm Performance

The Effect of Intellectual Capital on Firm Performance

The existing corporate performance measurement system is heavily inclined towards financial and physical aspects and lacks the relevant information on intellectual capital efficiency. The available ranking, performance measurement and market valuation for local banks are based on traditional measures; such as accounting figures or financial ratios ignoring the fact that, the intellectual capital is the banks’ primary input and is the most important resource for progress. This apparent inability of traditional financial accounting methods to adequately explain the gap between a firm’s market value and its financial performance has induced many researchers to carry out investigations on the role of intellectual capital, an element not fairly recognized in the financial statements. This book therefore examines the effect of intellectual capital on the financial performance of listed commercial banks in Kenya. The analysis is useful to investors, financial analysts or shareholders who are interested in knowing how the size of intellectual capital in a firm affects the firm’s performance. It also serves as a basis for further research and discussions on intellectual capital.

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Capital Structure & Profitability Analysis

Capital Structure & Profitability Analysis

The book is on “Capital Structure & Profitability Relationship – An empirical analysis to study the impact of Capital Structure on Financial Performance of Listed Public & Private Sector Banks in India.”And it includes overview of Indian Banking Sector, Structure of Indian Banking System, Problems or challenges faced by Indian Banking System, Basic information of selected sample Public & Private sector bank, Research Problem, Research Methodology, Literature Reviews, Research Design, Hypothesis building & its testing & Findings & conclusions on the same topic. In this Master Thesis, the research has been carried out by collecting the financial data of P & L A/C and Balance Sheet of selected Public & Private sector banks & by calculating various capital structure and profitability ratios from these data. Hypothesis testing has been carried out by performing ANOVA test for different variables like; Debt Ratio, Debt Equity Ratio, Coverage Ratio, ROCE, ROE, ROA, Financial Leverage & EPS and also by analyzing the relationship between various dependent & independent variable through Multiple Regression Analysis.

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