Author: Arvin Ghosh
Publisher: Routledge
ISBN: 1351530178
Category : Business & Economics
Languages : en
Pages : 140
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Book Description
Capital structure theory is one of the most dynamic areas of finance and forms the basis for modern thinking on the capital structure of firms. Much controversy has resulted from comparisons of the theory of capital structure originally developed by Franco Modigliani and Merton Miller to real-world situations. Two competing theories have emerged over the years, the optimal capital structure theory and the pecking order theory.Arvin Ghosh begins with an overview of the controversies regarding capital structure theories, and then statistically tests both the optimal capital structure and pecking order theories. Using the binomial approach he analyzes the determinants of capital structure while discussing the role of market power in determining capital structure decisions. Ghosh probes the questions of new stock offerings and stockholders' returns, and analyzes capital structure and executive compensation. He then looks into debt financing ownership structure, and the controversal relationship between capital structure and firm profitability. Finally, he discusses the latest developments in the field of capital structure.A concise overview of a major issue in business economics and finance, this volume provides a fuller understanding of capital structure influence on the financial performance of firms, and will certainly stimulate further debate. While hundreds of scholarly articles have been written on the subject this is the first book to test competing theories against measurements of firms' performance and their underlying capital structure.
Author: Sohail Amjed
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Firms have choices to raise their capital by various means including internally generated fund, new equity issue or various types of debt. The decision to select sources of finance is referred to as financial structure decision. Financial structure decision is very critical decision with great implications for the firm's performance. Theories proposed by the researchers to explain the financing decisions have always been subject of considerable debate. This study imperially explores the impact of debt financing on the profitability of the firms in Chemical Sector of Pakistan. The rationale behind the industry specific analysis is the fact that exogenous variables appear to force firms in the same industry in similar fashion. Therefore firms within same industry construct same type of capital structure. OLS has been applied to test the hypothesized relationship. Different perspectives have evolved over the period of time to explore the critical but very complex issue of financial structure decisions. Financial structure decisions base on many psychological and situational factors especially in developing countries like Pakistan. Financial Environment has great impact on financing decisions, the role of financial institutions is critical for capital restructuring decisions. In developing countries like Pakistan Financial Markets are incomplete and are unable to meet the financing requirements of the industry. Therefore, major source of debt financing for Pakistani companies is various types of loans with different maturities. Our results are not similar to the other studies conducted on capital structure. In oppose to literature our results reveal significant negative relationship between long term Debt and firms' performance and significant positive relationship between short term debt and the profitability.
Author: Felix Echekoba
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This study examines the impact of financial structure on performance of agricultural and healthcare firms listed in Nigerian Stock Exchange for a period of twenty one (21) years 1993 to 2013. This study selected fifteen (15) out of the sixteen (16) firms listed on agricultural and healthcare sectors. Data were collected from the Nigerian Stock Exchange factbook of various issues as relevant and were analysed using the pooled OLS, fixed, random effect models and the granger causality test. Financial structure was surrogated by total debt to total equity ratio, short term debt to total equity and total debt to total assets ratio while firm performance was measured by return on assets, return on equity, earnings per share and profit before tax. The analysis for the agricultural firms revealed that financial structure significantly impacts on earnings per share but does not impact on return on equity, return on asset and profit before tax. For healthcare firms, financial structure significantly impacts on earnings per share and profit before tax but does not impact on return on equity and return on assets. On the impact of the control variables on performance, it was observed that it is only risk that is significant in determining performance of agricultural firms while tangibility, size, growth and tax are significant factors that impact on performance of healthcare firms. To this effect, we suggests that it is very crucial for firm's management to carefully look at the debt-equity mix, which according to the result of the study, significantly impacts on performance of firms in agricultural and healthcare sectors.
Author: Mark Hirschey
Publisher: Emerald Group Publishing
ISBN: 1848555369
Category : Business & Economics
Languages : en
Pages : 268
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Book Description
Focuses on corporate governance, broadly defined as the system of controls that helps corporations and other organizations effectively manage, administer, and direct economic resources. This book focuses on: the impact of deregulation and corporate structure on productive efficiency; and the effectiveness of the fraud triangle and SAS.
Author: Oliver Hart
Publisher: Clarendon Press
ISBN: 0191521728
Category : Business & Economics
Languages : en
Pages : 244
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Book Description
This book provides a framework for thinking about economic instiutions such as firms. The basic idea is that institutions arise in situations where people write incomplete contracts and where the allocation of power or control is therefore important. Power and control are not standard concepts in economic theory. The book begins by pointing out that traditional approaches cannot explain on the one hand why all transactions do not take place in one huge firm and on the other hand why firms matter at all. An incomplete contracting or property rights approach is then developed. It is argued that this approach can throw light on the boundaries of firms and on the meaning of asset ownership. In the remainder of the book, incomplete contacting ideas are applied to understand firms' financial decisions, in particular, the nature of debt and equity (why equity has votes and creditors have foreclosure rights); the capital structure decisions of public companies; optimal bankruptcy procedure; and the allocation of voting rights across a company's shares. The book is written in a fairly non-technical style and includes many examples. It is aimed at advanced undergraduate and graduate students, academic and business economists, and lawyers as well as those with an interest in corporate finance, privatization and regulation, and transitional issues in Eastern Europe, the former Soviet Union, and China. Little background knowledge is required, since the concepts are developed as the book progresses and the existing literature is fully reviewed.
Author: Sedeaq Nassar
Publisher:
ISBN:
Category :
Languages : en
Pages : 4
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Book Description
The paper tries to examine the impact of capital structure on the financial firm performance of industrial companies in Turkey. the annual financial statements of 136 industrial companies listed on I s Istanbul Stock Exchange (ISE) was used for this study which covers a period of 8 years from 2005-20012. A multivariate regression analysis is applied to test the relationship between capital structure and firm performance. To measure firm performance used indicators such as Return on Asset (ROA), Return on Equity (ROE) and Earning per Share (EPS) as well as Debt Ratio (DR) as capital structure variable. The results show that there is a negative significant relationship between capital structure and firm performance.
Author: Peter Stahlecker
Publisher: Lucius & Lucius DE
ISBN: 9783828201972
Category :
Languages : en
Pages : 260
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Book Description
Author: John Joseph
Publisher:
ISBN: 9783668733084
Category :
Languages : en
Pages : 32
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Book Description
Seminar paper from the year 2018 in the subject Business economics - Business Management, Corporate Governance, language: English, abstract: The International Financial Reporting Standards (IFRS) is a high quality and principle based reporting standards that remove many accounting alternatives. It is therefore, consequently expected to limit the management's discretion and lessen practices on earnings management. Quite the opposite, some researchers argue that the flexibility in IFRS and its fair value pre-eminence might afford greater opportunities for firms to manage earnings. It is this inaptness which incited and aggravated the conduct of this study. This study applies a desktop review to investigate the worldwide existing empirical research evidence on the effect of IFRS on earnings management post- IFRS adoption and in relation to other reporting standards and reports whether the results are indistinguishable between developed and developing economies. Accounting research in developed economies has long identified earnings management as a means by which managers manipulate financial reports to mislead other stakeholders on the underlying economic performance of the firm. However, earnings management research did not receive much attention in developing countries such as Nigeria until recently. The findings reveal that the existing empirical crams and conclusions there on are mixed, inconsistent and difficult to generalise. This indicates the pressing need for country, especially Nigeria to engage on studies of this nature. The study further, stumbles on the fact that IFRS can indistinctly benefit both developing and developed markets when coupled with appropriate effective enforcement machinery. Substantially, the results entail that IFRS is a critical determinant for quality reporting but not a 'prima facie' guarantor for quality reporting.
Author: Hoang N. Pham
Publisher: Routledge
ISBN: 1000540278
Category : Business & Economics
Languages : en
Pages : 190
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Book Description
The relationship between ownership structure and firm performance has been studied extensively in corporate finance and corporate governance literature. Nevertheless, the mediation (path) analysis to examine the issue can be adopted as a new approach to explain why and how ownership structure is related to firm performance and vice versa. This approach calls for full recognition of the roles of agency costs and corporate risk-taking as essential mediating variables in the bi-directional and mediated relationship between ownership structure and firm performance. Based on the agency theory, corporate risk management theory and accounting for the dynamic endogeneity in the ownership–performance relationship, this book develops two-mediator mediation models, including recursive and non-recursive mediation models, to investigate the ownership structure–firm performance relationship. It is demonstrated that agency costs and corporate risk-taking are the ‘missing links’ in the ownership structure–firm performance relationship. Hence, this book brings into attention the mediation and dynamic approach to this issue and enhances the knowledge of the mechanisms for improving firm’s financial performance. This book will be of interest to corporate finance, management and economics researchers and policy makers. Post-graduate research students in corporate governance and corporate finance will also find this book beneficial to the application of econometrics into multi-dimensional and complex issues of the firm, including ownership structure, agency problems, corporate risk management and financial performance.
Author: N. Capon
Publisher: Springer Science & Business Media
ISBN: 9780792398318
Category : Business & Economics
Languages : en
Pages : 428
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Book Description
This volume is a milestone on our journey toward developing a more comprehensive understanding of the underpinnings of corporate financial performance. Weare concerned with both the factors that cause the financial performance of some firms to be better than others at a point in time and those factors that influence the trajectory of firm financial performance over time. In addressing these issues, we consider theoretical and empirical work on financial performance, drawn from several literatures, as well as present the results from our own empirical study. The review of the theoretical and empirical work is contemporary; the major portion of data comprising the empirical study was collected in the early 1980s as part of the Columbia Business School project on corporate strategic planning, but some data sequences extend into the mid-1980s and early 1990s. Our goals are to improve understanding of firm financial performance by developing a more integrated framework and to develop a research agenda based on what we have learned. This volume consists of four chapters, 12 appendices that provide detailed technical support and development for various portions of the discussion and an extensive set of references. It interweaves results from published literature in various fields with our original empirical work and develops an integrative approach to the study of firm fmancial performance.
