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financial structure that has the purpose of maximizing business performance in the sense of maximizing profitability and return … profitability (measured by rates of return on equity). This paper seeks to answer the question of cause and effect in the context of … financial structure and profitability of the company: whether a certain financial structure (higher or lower indebtedness …
Persistent link: https://www.econbiz.de/10011588163
debt structure, and the effect of this on corporate profitability. The assumption on which the study was based is that, if … profitability but no significant relationship between firm's working capital composition and profitability. The results, however … profitability is positively affected. The study therefore recommends that, for firms to optimize profitability and to maintain good …
Persistent link: https://www.econbiz.de/10010224764
Operating leverage increases profitability and reduces optimal financial leverage. Thus, operating leverage generates a … negative relation between profitability and financial leverage that is thought to be inconsistent with the trade-off theory …, but is commonly observed in the data. We demonstrate the effect of operating leverage on firms' profitability and …
Persistent link: https://www.econbiz.de/10012974654
debt structure, and the effect of this on corporate profitability. The assumption on which the study was based is that, if … profitability but no significant relationship between firm's working capital composition and profitability. The results, however … profitability is positively affected. The study therefore recommends that, for firms to optimize profitability and to maintain good …
Persistent link: https://www.econbiz.de/10013071720
This paper offers an alternative theory of corporate finance, to replace the invalid MM theorem. It derives the optimal amount of fund, which can be equity or debt. It introduces a new concept called marginal yield. It corrects the meaning of borrowing. It reproduces the MM theorem, to show its...
Persistent link: https://www.econbiz.de/10012989765
equity holders, the company has to earn good profit and maintain proper debt and equity position. This paper makes an attempt … to identify the relevance of capital structure on profitability of ten BSE SENSEX companies from different industries … over the period of 10 years from 2007 to 2016. The data has been analysed using debt equity ratio, profitability ratios …
Persistent link: https://www.econbiz.de/10012924254
We revisit the well-established puzzle that leverage is negatively correlated with measures of profitability. In … between profitability and leverage is positive. At other times, it is negative. These results are consistent with dynamic … profitability in the quarters prior to rebalancing events match the patterns predicted by these models. Our results are not driven …
Persistent link: https://www.econbiz.de/10013036317
We investigate the relationship between profitability and financial leverage for US listed non-financial corporations …-cost mark-ups notwithstanding high product similarity, the relationship between profitability and financial leverage is negative … finance, whereby firms increase their degree of financial leverage in response to profitability improvements. Not only do …
Persistent link: https://www.econbiz.de/10013297000
Profitability is substantial for any firm to maintain business and enable long-term sustainability. Firms' decision on … new empirical evidence on the influence of debt (debt ratio and debt to equity ratio) on firm profitability (ROA), with … significant correlation and negative influence of debt ratio and capital structure on firm profitability. …
Persistent link: https://www.econbiz.de/10013266167
This paper studies how tax shields of loss-making entities affect resource allocation within business groups. Evidence from a large international sample and a single-country regression discontinuity design suggests that groups avoid their member firms' defaults when tax shields from...
Persistent link: https://www.econbiz.de/10012847383