Download or read book Capital Structure and Corporate Financing Decisions written by H. Kent Baker and published by John Wiley & Sons. This book was released on 2011-03-31 with total page 504 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive guide to making better capital structure and corporate financing decisions in today's dynamic business environment Given the dramatic changes that have recently occurred in the economy, the topic of capital structure and corporate financing decisions is critically important. The fact is that firms need to constantly revisit their portfolio of debt, equity, and hybrid securities to finance assets, operations, and future growth. Capital Structure and Corporate Financing Decisions provides an in-depth examination of critical capital structure topics, including discussions of basic capital structure components, key theories and practices, and practical application in an increasingly complex corporate world. Throughout, the book emphasizes how a sound capital structure simultaneously minimizes the firm's cost of capital and maximizes the value to shareholders. Offers a strategic focus that allows you to understand how financing decisions relates to a firm's overall corporate policy Consists of contributed chapters from both academics and experienced professionals, offering a variety of perspectives and a rich interplay of ideas Contains information from survey research describing actual financial practices of firms This valuable resource takes a practical approach to capital structure by discussing why various theories make sense and how firms use them to solve problems and create wealth. In the wake of the recent financial crisis, the insights found here are essential to excelling in today's volatile business environment.

Download or read book Capital Structure and Firm Performance written by Arvin Ghosh and published by Routledge. This book was released on 2017-07-05 with total page 143 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book The Effect of Capital Structure on Profitability of Energy American Firms written by Mohamed Tailab and published by . This book was released on 2018 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper empirically aims to analyze the effect of capital structure on financial performance.Two main sets of variables were used: For profitability, return on assets (ROA) as the ratio of net income to total assets, and return on equity (ROE) as the ratio of net income to total shareholders' equity were adopted as a proxy for financial performance; and to indicate capital structure, short-term debt, long-term debt, total debt, debt to equity ratio, and firm's size were used. A sample of 30 Energy American firms for a period of nine years from 2005 - 2013 was considered. Secondary data were collected from financial statements which were taken from Mergent online. The data were analyzed by using Smart PLS (Partial Least Square) version 3. Multiple regressions indicated that 10% of ROE and 34% of ROA were predicted by the independent variables. Findings also presented that the total debt has a significant negative impact on ROE and ROA, while size in terms of sales has significantly negative effect only on ROE of the American firms. However, a short debt significantly has a positive influence on ROE. An insignificant either negative or positive relationship was observed between long term debt, debt to equity and size in terms of total assets and profitability. A generalization of the results is limited because of the small sample size. For future research, the author suggests addressing a longer period of time with a large sample size of firms. It would be more accurate if future studies included more independent variables such as taxation and concentration.

Download or read book Examining the Relationship Between Capital Structure and Profitability written by Paul Akabanteng and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Empirical Capital Structure written by Christopher Parsons and published by Now Publishers Inc. This book was released on 2009 with total page 107 pages. Available in PDF, EPUB and Kindle. Book excerpt: Empirical Capital Structure reviews the empirical capital structure literature from both the cross-sectional determinants of capital structure as well as time-series changes.

Download or read book Corporate Capital Structures in the United States written by Benjamin M. Friedman and published by University of Chicago Press. This book was released on 2009-05-15 with total page 404 pages. Available in PDF, EPUB and Kindle. Book excerpt: The research reported in this volume represents the second stage of a wide-ranging National Bureau of Economic Research effort to investigate "The Changing Role of Debt and Equity in Financing U.S. Capital Formation." The first group of studies sponsored under this project, which have been published individually and summarized in a 1982 volume bearing the same title (Friedman 1982), addressed several key issues relevant to corporate sector behavior along with such other aspects of the evolving financial underpinnings of U.S. capital formation as household saving incentives, international capital flows, and government debt management. In the project's second series of studies, presented at the National Bureau of Economic Research conference in January 1983 and published here for the first time along with commentaries from that conference, the central focus is the financial side of capital formation undertaken by the U.S. corporate business sector. At the same time, because corporations' securities must be held, a parallel focus is on the behavior of the markets that price these claims.

Download or read book The Cost of Capital written by Wilbur G. Lewellen and published by . This book was released on 1976 with total page 148 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Relationship Between Capital Structure and the Financial Performance of the Firm written by Cunning Gangeni and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate finance literature suggests that the capital structure decision has played a pivotal role over the years in driving the establishment and growth of firms. There is also a body of evidence that financial markets take a keen interest in firm performance, especially for those listed on the stock exchange. There is no empirical evidence that there is a causal relationship between capital structure and the firm's performance despite the importance of the two concepts in corporate finance. This study uses the debt/equity ratio as a proxy for capital structure and a selected few financial ratios to represent attributes of firm performance (e.g. profitability and shareholder value) in investigating the relationship between the two in the South African context. The results based on stock exchange data as input are inconclusive but they lay a foundation for potential future research. Interesting insights are drawn from using some limitations identified in the literature to try and explain why the results are the way that they are.

Download or read book Management Accounting for Decision Makers written by Peter Atrill and published by Pearson Education. This book was released on 2007 with total page 532 pages. Available in PDF, EPUB and Kindle. Book excerpt: This text is an introductory course in management accounting for those seeking an understanding of basic principles and underlying concepts without detailed technical knowledge. It has a strong practical emphasis, with plenty of examples taken from the real world as well as numerical examples with step-by-step explanations.

Download or read book The Capital Structure Decision written by Harold Bierman Jr. and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 1958 an academic paper on corporate finance written by two professors (Merton Miller and Frances Modigliani, who were later awarded the Nobel prize for their research efforts) was published in The American Economic Review. One prime conclusion of their paper was that the exact form of a firm's capital structure did not affect the firm's value. Later papers by the same two authors and by many others modified the assumptions and changed this conclusion. We now think that capital structure decisions do affect a firm's value and corporate managers should understand better the financing alternatives that are available. One of the most important financial decisions is the decision to buy or lease assets. The leasing industry is large and getting larger. Unfortunately, it is very easy for a firm to evaluate incorrectly lease alternatives (see Chapter 12). The capital structure decision is one of the three most important financial decisions that management make (the distribution of earnings and the capital budgeting decisions are the other two contenders). Managers should increase their understanding of capital structure alternatives and remember that choosing the best capital structure is an art and not an exact simple calculation. But applying the art can be improved with understanding.

Download or read book The Effect of Capital Structure on Firms Profitability written by Tariku Negasa and published by LAP Lambert Academic Publishing. This book was released on 2013 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Capital Structure and Corporate Governance written by Lorenzo Sasso and published by Kluwer Law International B.V.. This book was released on 2013-08-01 with total page 360 pages. Available in PDF, EPUB and Kindle. Book excerpt: Despite a clear distinction in law between equity and debt, the results of such a categorization can be misleading. The growth of financial innovation in recent decades necessitates the allocation of control and cash-flow rights in a way that diverges from the classic understanding. Some of the financial instruments issued by companies, so-called hybrid instruments, fall into a grey area between debt and equity, forcing regulators to look beyond the legal form of an instrument to its practical substance. This innovative study, by emphasizing the agency relations and the property law claims embedded in the use of such unconventional instruments, analyses and discusses the governance regulation of hybrids in a way that is primarily functional, departing from more common approaches that focus on tax advantages and internal corporate control. The author assesses the role of hybrid instruments in the modern company, unveiling the costs and benefits of issuing these securities, recognizing and categorizing the different problem fields in which hybrids play an important role, and identifying legal and contracting solutions to governance and finance problems. The full-scale analysis compares the U.K. law dealing with hybrid instruments with the corresponding law of the most relevant U.S. jurisdictions in relation to company law. The following issues, among many others, are raised: decisions under uncertainty when the risks of opportunism of the parties is very high; contract incompleteness and ex post conflicts; protection of convertible bondholders in mergers and acquisitions and in assets disposal; use of convertible bonds to reorganise and restructure a firm; timing of the conversion and the issuer’s call option; majority-minority conflict in venture capital financing; duty of loyalty; fiduciary duties to preference shareholders; and financial contract design for controlling the board’s power in exit events. Throughout, the analysis includes discussion, comparison, and evaluation of statutory provisions, existing legal standards, and strategies for protection. It is unlikely that a more thorough or informative account exists of the complex regulatory problems created by hybrid financial instruments and of the different ways in which regulatory regimes have responded to the problems they raise. Because business parties in these jurisdictions have a lot of scope and a strong incentive to contract for their rights, this book will also be of uncommon practical value to corporate counsel and financial regulators as well as to interested academics.

Download or read book Capital Structure and Profitability written by Dilrukshi Yapa Abeywardhana and published by . This book was released on 2016 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the relationship between capital structure and the profitability of non-financial SMEs in the UK for the period of 1998-2008. Using the Two Stage Least Squares, (2SLS) the results show a significant relationship with capital structure and profitability which is negatively related. The size of the firm appears a more important factor that determines the profitability in SMEs in the UK. There is consistent evidence for positive size-profitability relationship. The results of this study have shown that the capital structure of the firm has a significant influence on the profitability of SMEs in the UK. Especially, long-term debt to total assets ratio is negatively related with the profitability and this is an indication that SMEs are averse to use more equity because of the fear of losing the control.

Download or read book Financial Policies of Business Enterprise written by William Bayard Taylor and published by . This book was released on 1942 with total page 1168 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Collateral readings" at end of most of the chapters.

Download or read book Relationship Between Capital Structure and Profitability written by Chong-Chuo Chang and published by . This book was released on 2020 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt: Purpose: Capital structure is one of the hot topics in corporate finance. To meet the needs of stakeholders, firms need to build a capital structure that is desirable for shareholders by decrease financial risk and expand their profitability. Thus, the aim of this study is to investigate the relationship between capital structure and profitability.Methods: In examining the relationship between capital structure and profitability, we apply correlation and regression analysis on dataset from 2003 to 2016 for the firms in the Four Asian Tiger economies. The data are collected from the Compustat Global Vantage database and include 46,301 observations.Findings: This study finds a significantly negative relationship between leverage and profitability, a significantly positive relationship between growth and leverage in Taiwan, Korea and Hong Kong and a significantly positive relationship between size and leverage in each country.Significance of the study: This study empirically examines the impacts of capital structure on the profitability in the case of firms of Four Asian Tiger economies, which appears to be main contribution to the literature of corporate finance.

Download or read book Impact Of Capital Structure On The Profitability Of Quoted Insurance Companies In Nigeria written by and published by GRIN Verlag. This book was released on 2021-12-03 with total page 67 pages. Available in PDF, EPUB and Kindle. Book excerpt: Studienarbeit aus dem Jahr 2020 im Fachbereich BWL - Bank, Börse, Versicherung, , Sprache: Deutsch, Abstract: The study examines the impact of capital structure on the profitability of Nigerian quoted insurance companies with specific emphasis on AIICO Plc which is one of the 15 quoted insurance companies in Nigeria. The scope covers the period of ten (10) years (2010 to 2020). AIICO PLC was selected based on the criteria of data availability. The study assists financial managers of firms to determine the proportion of equity capital and debt capital (capital structure) to obtain the debt financing mix that will optimize the value of the firm. This study, therefore, has contributed to the literature by examining capital structure and profitability of Nigerian quoted insurance companies. The study aids in the understanding of the impact of capital structure on insurance profitability. This has helped us to understand the impact of capital structure in profitability of Nigeria quoted insurance companies. The outcome from this study will help decisions on capital structure and allow the policy makers in formulating informed policies on capital structure and also to measure the implications of such policies on the operations of quoted insurance companies. This will go a long way in helping investors in deciding whether to pull out their share in pursuance of capital gains or preserve their stake in a corporation. The study will contribute to existing body of knowledge by investigating capital structure and profitability of Nigerian quoted insurance companies.

Download or read book The Handbook of Financing Growth written by Kenneth H. Marks and published by Wiley. This book was released on 2005-05-31 with total page 496 pages. Available in PDF, EPUB and Kindle. Book excerpt: An in-depth look at the strategies, capital structure, and fund raising techniques for emerging growth and middle-market companies. Here is a comprehensive and practical guide to understanding and applying the basics of corporate finance to emerging growth and middle-market companies. Using empirical data and actual company cases to illustrate capital structures and financing approaches, the book provides a detailed discussion of the many funding instruments, from traditional bank loans and asset-based financing to different types of private equity and other creative solutions; the types of funding sources and their expected rates of returns; and typical deal terms.