International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
This paper scrutinizes Determinants of Capital Structure: A study on some selected corporate firms in Bangladesh. We have taken 10 out of 37 listed companies of DSE dividing into two sectors i.e. Pharmaceuticals and chemicals and Tannery sector, five years data from 2013 to 2017 has been collected from respective annual reports. Total number of observations was 50. There are different factors that affect a firm's capital structure decision. We use leverage (D/E ratio) as dependent variable and independent variables are profitability, tangibility, tax, size, growth, non-debt tax shield (NDTS) and financial costs. By using Descriptive Statistical Analysis, Correlation Analysis and Regression Analysis tools we find that Tangibility, size, NDTS, and financial costs are positively related with leverage and Profitability, tax, and growth are negatively related with leverage. In our analysis we see profitability, tangibility of asset, growth and non-debt tax shield have significant association. So when we take capital structure decision of the above firms we should consider profitability, tangibility of asset, growth and non-debt tax shield because other independent variables are insignificant in the context of Bangladesh economy.
Age of the publication firm as a factor influencing capital structure of insu...Gerishom Wafula Manase
Capital structure refers to the combination of debt and equity capital a firm uses to finance its long term operations. The capital structure decision can affect the value of the firm by changing the firm’s expected earnings, its cost of capital or both. One of the most important objectives of determining an optimal capital structure of the firm is to ensure the lowest cost of capital and to maximize shareholders wealth. This paper is on age as a factor affecting capital structure in the insurance sector companies. This study sought to establish the influence of age as a factor of capital structure of the insurance companies in Kenya. The study focused on the entire population of the registered insurance companies listed in the Nairobi Securities Exchange in Kenya. Expectedly, the result of the study is sufficient to give an insight into how age of insurance company influences its capital structure among the listed insurance companies in the Nairobi Securities Exchange in Kenya. This study employed univariate analysis to measure the impact of This factor on the company’s capital structure. The findings established a co efficient of correlation of 0.809 and a regression of 0.65 indicating a strong relation between age and the capital structure of insurance companies
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
This paper scrutinizes Determinants of Capital Structure: A study on some selected corporate firms in Bangladesh. We have taken 10 out of 37 listed companies of DSE dividing into two sectors i.e. Pharmaceuticals and chemicals and Tannery sector, five years data from 2013 to 2017 has been collected from respective annual reports. Total number of observations was 50. There are different factors that affect a firm's capital structure decision. We use leverage (D/E ratio) as dependent variable and independent variables are profitability, tangibility, tax, size, growth, non-debt tax shield (NDTS) and financial costs. By using Descriptive Statistical Analysis, Correlation Analysis and Regression Analysis tools we find that Tangibility, size, NDTS, and financial costs are positively related with leverage and Profitability, tax, and growth are negatively related with leverage. In our analysis we see profitability, tangibility of asset, growth and non-debt tax shield have significant association. So when we take capital structure decision of the above firms we should consider profitability, tangibility of asset, growth and non-debt tax shield because other independent variables are insignificant in the context of Bangladesh economy.
Age of the publication firm as a factor influencing capital structure of insu...Gerishom Wafula Manase
Capital structure refers to the combination of debt and equity capital a firm uses to finance its long term operations. The capital structure decision can affect the value of the firm by changing the firm’s expected earnings, its cost of capital or both. One of the most important objectives of determining an optimal capital structure of the firm is to ensure the lowest cost of capital and to maximize shareholders wealth. This paper is on age as a factor affecting capital structure in the insurance sector companies. This study sought to establish the influence of age as a factor of capital structure of the insurance companies in Kenya. The study focused on the entire population of the registered insurance companies listed in the Nairobi Securities Exchange in Kenya. Expectedly, the result of the study is sufficient to give an insight into how age of insurance company influences its capital structure among the listed insurance companies in the Nairobi Securities Exchange in Kenya. This study employed univariate analysis to measure the impact of This factor on the company’s capital structure. The findings established a co efficient of correlation of 0.809 and a regression of 0.65 indicating a strong relation between age and the capital structure of insurance companies
VESTIGATION OF DYNAMIC INVOLVED IN DETERMINATION OF CAPITAL STRUCTURE OF KARU...IAEME Publication
An appropriate capital structure is a critical decision for any business organization to be taken
by business organization for maximization of shareholders wealth and sustained growth. The main
objectives this study was investigating the determinants of capital structure of the selected private
Bank in India. Thus, the major focus of this study was to investigate empirically firm specific factors
such as, Size, Tangibility, Profitability, Dividend Payout Ratio, Taxation, and Risk. In this study, only
secondary data was used. The data collected from the annual report published by the Bank.
Relevance of Mergers and Acquisition on Financial Performance of Deposit Mone...iosrjce
The paper examined the effects of Merger and Acquisition on the financial performance of selected
deposit money banks in Nigeria with emphasis on Profit After Tax, Gross Earnings and Asset Growth as
financial efficiency parameters. Two Nigeria Deposit Money Bank were selected using convenience and
judgemental sample selection methods. Data were collected from the published financial statements of the banks
namely former Oceanic bank and Ecobank Plc (now Ecobank Plc) and former Intercontinental Bank Plc and
Access Bank (Access Bank Plc). Data were analyzed using Linear Regression statistical tool. The results
revealed that Post Merger Financial Performance was significantly improved than the Pre Merger period of the
banks. The study therefore recommends that banks can merge or acquire each other as this has proved to
become a plat form for rescuing ailing ones and could provides a platform that could enhance batter financial
performance
An Empirical Analysis on the Nature of Relationship between Capital Structure...iosrjce
The financing decision with regard to capital structure theory of finance has been a topic of many
theories and their conflicting output for past many years. This paper aims to analyse the nature of relationship
between the capital structure of a firm and its performance. The data of 40 firms excluding financial services
firms listed on Nifty indices on National Stock Exchange is studied (The composition of 50 firms on Nifty
represents a well branch out index reflecting precisely the overall market conditions). Financial services firms
have been excluded from purview of this paper, as they are in the business of collecting money and investing in
financial assets rather than producing goods, hence follow a unique business valuation model. Further financial
services sector being one of the most sensitive sectors. This paper analyzes a period of 13 years (2001-2014)
covering the phases of a business cycle starting from boom (2001/02-2006/07), recession (2007/08-2008/09)
and then recovery (2009/10-2013/14). The complete business cycle will aid to demonstrate the results more
accurately. This paper also surveys the topical developments in the empirical capital structure research. The
data for a period of 13 years is analysed using descriptive statistics, correlation and multiple regression
techniques. For research purpose, the ratios such as debt-equity ratio, debt-asset ratio and long term debt are
taken as independent variables whereas Net Profit, Net Profit Margin, ROCE, ROE and ROA are the ratios
taken as dependent variables.
Korean economy undergoes pre-modernized corporate governance. Financial-market imperfections assumed to be incorporated in equity ratio affect the sensitivity of internal funds to physical investment. Empirical analyses show that the effects of asymmetric information are significant. Theories predict that internal finance is less costly than borrowing or issuing equity. Higher cash flow from higher profits affects investment ratio. But, this marginal effect is decreased by equity ratio. If we assume that more imperfect financial market requires more equity than borrowing, we can see that agency costs change the way economic variables like cash flow affect physical investment. Cash flow plays two opposite roles for implementing investment. In the case of financial-imperfections, we can expect that firms with higher profits invest more. But, according to free cash flow hypothesis by Jensen (1986), managers with only a small ownership interest have an incentive for wasteful management. We can expect to see more wasteful activity in a firm with large cash flows. Our regression result shows that the former dominates the latter, so we get positive coefficient for cash flow variable on the physical investment.
Corporate Governance on Earnings Management in Listed Deposit Money Bank in N...ijtsrd
The increase in the manipulation of accounting records and collapse of some Nigerian Deposit Money Banks have left question in the mind of researchers on the role of corporate governance. This paper was carried out to examine the impact of corporate governance attributes on earnings management of listed Deposit Money Banks from 2009 to 2017. The study used a sample size of thirteen 13 banks. The dependent variable was measured using Discretionary Loan Loss Provision Model by Chang, Shen and Fang 2008 . Correlational design was employed the secondary data was obtained from the annual reports of the firms and Nigerian Stock Exchange website. The results from the multiple regression analysis proved that board size has positive and significant impact on earnings management board independence has negative and significant impact on earnings management while board of directors' ownership has insignificant impact on earnings management. The study concludes that effective monitoring role of independence directors will constrain the opportunistic behavior by managers. The paper therefore recommends among others that banks should increase the numbers of independent directors on the board to improve their monitoring effectiveness. Olaleye John Olatunde | Amafa Etupu Oluwafunmilayo "Corporate Governance on Earnings Management in Listed Deposit Money Bank in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29515.pdfPaper URL: https://www.ijtsrd.com/management/other/29515/corporate-governance-on-earnings-management-in-listed-deposit-money-bank-in-nigeria/olaleye-john-olatunde
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
This research investigates the determinants of the capital structure of firms listed service sector on BIST(Borsa Istanbul) and the adjustment process towards this target. The econometric analysis employs the Generalized Method of Moments estimators (GMM-Sys, GMM difference) techniques that controls for unobserved firm-specific effects and the endogeneity problem. The findings of the paper suggest that firms have target leverage ratios and they adjust to them relatively fast. Consistent with the predictions of capital structure theories and the findings of the empirical literature, the results of this paper suggest that size, assets tangibility, profitability, growth opportunity except earnings volatility have significant effects on the capital structure choice of hotels and restaurants.The capital structure or leverage is measured by total debt ratio. Analysis results indicates that firms with high profits, sizable, high fixed assets ratio and high total sales and more growth opportunities tend to have relatively less debt in their capital structures.
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Study of the Static Trade-Off Theory determinants vis-à-vis Capital Structure...inventionjournals
This paper investigates the application of the Static Trade-Off theory regarding the capital structure of the Pakistani Chemical Industry. We have used panel data analysis for the sample of 31 listed chemical firms from the period 2005 to 2013. The study is unique in its type as unlike to Shah & Hijazi (2005) who studied many industrial sections, this study only focuses on the listed Chemical Firms. We used five independent variables such as Profitability (P), Tangibility (T), Liquidity (L), Firm Size (FS) and Total Assets Growth (TAG) to study the effect on independent variable Financial Leverage (FG). The results confirmed the relationship of Profitability, Liquidity and Firm Size. However the results were not confirmed for Tangibility and Firm Assets Growth. Even though the results for Tangibility were positive, however the significance of the coefficients failed to support the hypothesis. This study hold a unique position for researchers for future research and also has significance for the investors helping them to make wise investment decisions when investing in Pakistani Chemical Industry since this industry holds a major portion of industrial GDP of the country
Determinants of Capital Structure in Indonesian Banking Sector inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
VESTIGATION OF DYNAMIC INVOLVED IN DETERMINATION OF CAPITAL STRUCTURE OF KARU...IAEME Publication
An appropriate capital structure is a critical decision for any business organization to be taken
by business organization for maximization of shareholders wealth and sustained growth. The main
objectives this study was investigating the determinants of capital structure of the selected private
Bank in India. Thus, the major focus of this study was to investigate empirically firm specific factors
such as, Size, Tangibility, Profitability, Dividend Payout Ratio, Taxation, and Risk. In this study, only
secondary data was used. The data collected from the annual report published by the Bank.
Relevance of Mergers and Acquisition on Financial Performance of Deposit Mone...iosrjce
The paper examined the effects of Merger and Acquisition on the financial performance of selected
deposit money banks in Nigeria with emphasis on Profit After Tax, Gross Earnings and Asset Growth as
financial efficiency parameters. Two Nigeria Deposit Money Bank were selected using convenience and
judgemental sample selection methods. Data were collected from the published financial statements of the banks
namely former Oceanic bank and Ecobank Plc (now Ecobank Plc) and former Intercontinental Bank Plc and
Access Bank (Access Bank Plc). Data were analyzed using Linear Regression statistical tool. The results
revealed that Post Merger Financial Performance was significantly improved than the Pre Merger period of the
banks. The study therefore recommends that banks can merge or acquire each other as this has proved to
become a plat form for rescuing ailing ones and could provides a platform that could enhance batter financial
performance
An Empirical Analysis on the Nature of Relationship between Capital Structure...iosrjce
The financing decision with regard to capital structure theory of finance has been a topic of many
theories and their conflicting output for past many years. This paper aims to analyse the nature of relationship
between the capital structure of a firm and its performance. The data of 40 firms excluding financial services
firms listed on Nifty indices on National Stock Exchange is studied (The composition of 50 firms on Nifty
represents a well branch out index reflecting precisely the overall market conditions). Financial services firms
have been excluded from purview of this paper, as they are in the business of collecting money and investing in
financial assets rather than producing goods, hence follow a unique business valuation model. Further financial
services sector being one of the most sensitive sectors. This paper analyzes a period of 13 years (2001-2014)
covering the phases of a business cycle starting from boom (2001/02-2006/07), recession (2007/08-2008/09)
and then recovery (2009/10-2013/14). The complete business cycle will aid to demonstrate the results more
accurately. This paper also surveys the topical developments in the empirical capital structure research. The
data for a period of 13 years is analysed using descriptive statistics, correlation and multiple regression
techniques. For research purpose, the ratios such as debt-equity ratio, debt-asset ratio and long term debt are
taken as independent variables whereas Net Profit, Net Profit Margin, ROCE, ROE and ROA are the ratios
taken as dependent variables.
Korean economy undergoes pre-modernized corporate governance. Financial-market imperfections assumed to be incorporated in equity ratio affect the sensitivity of internal funds to physical investment. Empirical analyses show that the effects of asymmetric information are significant. Theories predict that internal finance is less costly than borrowing or issuing equity. Higher cash flow from higher profits affects investment ratio. But, this marginal effect is decreased by equity ratio. If we assume that more imperfect financial market requires more equity than borrowing, we can see that agency costs change the way economic variables like cash flow affect physical investment. Cash flow plays two opposite roles for implementing investment. In the case of financial-imperfections, we can expect that firms with higher profits invest more. But, according to free cash flow hypothesis by Jensen (1986), managers with only a small ownership interest have an incentive for wasteful management. We can expect to see more wasteful activity in a firm with large cash flows. Our regression result shows that the former dominates the latter, so we get positive coefficient for cash flow variable on the physical investment.
Corporate Governance on Earnings Management in Listed Deposit Money Bank in N...ijtsrd
The increase in the manipulation of accounting records and collapse of some Nigerian Deposit Money Banks have left question in the mind of researchers on the role of corporate governance. This paper was carried out to examine the impact of corporate governance attributes on earnings management of listed Deposit Money Banks from 2009 to 2017. The study used a sample size of thirteen 13 banks. The dependent variable was measured using Discretionary Loan Loss Provision Model by Chang, Shen and Fang 2008 . Correlational design was employed the secondary data was obtained from the annual reports of the firms and Nigerian Stock Exchange website. The results from the multiple regression analysis proved that board size has positive and significant impact on earnings management board independence has negative and significant impact on earnings management while board of directors' ownership has insignificant impact on earnings management. The study concludes that effective monitoring role of independence directors will constrain the opportunistic behavior by managers. The paper therefore recommends among others that banks should increase the numbers of independent directors on the board to improve their monitoring effectiveness. Olaleye John Olatunde | Amafa Etupu Oluwafunmilayo "Corporate Governance on Earnings Management in Listed Deposit Money Bank in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29515.pdfPaper URL: https://www.ijtsrd.com/management/other/29515/corporate-governance-on-earnings-management-in-listed-deposit-money-bank-in-nigeria/olaleye-john-olatunde
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
This research investigates the determinants of the capital structure of firms listed service sector on BIST(Borsa Istanbul) and the adjustment process towards this target. The econometric analysis employs the Generalized Method of Moments estimators (GMM-Sys, GMM difference) techniques that controls for unobserved firm-specific effects and the endogeneity problem. The findings of the paper suggest that firms have target leverage ratios and they adjust to them relatively fast. Consistent with the predictions of capital structure theories and the findings of the empirical literature, the results of this paper suggest that size, assets tangibility, profitability, growth opportunity except earnings volatility have significant effects on the capital structure choice of hotels and restaurants.The capital structure or leverage is measured by total debt ratio. Analysis results indicates that firms with high profits, sizable, high fixed assets ratio and high total sales and more growth opportunities tend to have relatively less debt in their capital structures.
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Study of the Static Trade-Off Theory determinants vis-à-vis Capital Structure...inventionjournals
This paper investigates the application of the Static Trade-Off theory regarding the capital structure of the Pakistani Chemical Industry. We have used panel data analysis for the sample of 31 listed chemical firms from the period 2005 to 2013. The study is unique in its type as unlike to Shah & Hijazi (2005) who studied many industrial sections, this study only focuses on the listed Chemical Firms. We used five independent variables such as Profitability (P), Tangibility (T), Liquidity (L), Firm Size (FS) and Total Assets Growth (TAG) to study the effect on independent variable Financial Leverage (FG). The results confirmed the relationship of Profitability, Liquidity and Firm Size. However the results were not confirmed for Tangibility and Firm Assets Growth. Even though the results for Tangibility were positive, however the significance of the coefficients failed to support the hypothesis. This study hold a unique position for researchers for future research and also has significance for the investors helping them to make wise investment decisions when investing in Pakistani Chemical Industry since this industry holds a major portion of industrial GDP of the country
Determinants of Capital Structure in Indonesian Banking Sector inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Firm Performance Based on Acquisition, Merger, and Debt Policy on SOE in Indo...AJHSSR Journal
ABSTRACT: This study aims to examine the effect of acquisitions, mergers, and debt policies on company
performance in BUMN companies listed on BPS for the 2016-2020 period. The data collection technique used
was purposive sampling, where the sample obtained was 317 that met the criteria. The data analysis techniques
used in this study are descriptive statistics, classical assumption tests, multiple regression analysis tests and
hypothesistesting. Based on the research conducted, the research results show that acquisitions and mergers havea
significant effect on company performance, as well as debt policy which has a significant effect on company
performance.
KEYWORDS: Acquisition, Merger, Debt, Firm Performance
Impact of Firm Specific Factors on Capital Structure Decision: An Empirical S...Waqas Tariq
Abstract This study attempts to explore the impact of firm specific factors on capital structure decision for a sample of 39-firm listed on Dhaka Stock Exchange (DSE) during 2003-2007. To achieve the objectives, this study tests a null hypothesis that none of the firm’s specific factors namely profitability, tangibility, non-debt tax shield, growth opportunities, liquidity, earnings volatility, size, dividend payment, managerial ownership, and industry classification has significant impact on leverage using estimate of fixed effect model under Ordinary Least Square (OLS) regression. Checking multicollinearity and estimating regression analysis through Pearson correlation and autoregressive mode respectively this study found that profitability, tangibility, liquidity, and managerial ownership have significant and negative impact on leverage. Positive and significant impact of growth opportunity and non-debt tax shield on leverage has been found in this study. On the other hand size, earnings volatility, and dividend payment were not found to be significant explanatory variables of leverage. Results also reveal that total debt to total assets ratios are significantly different across Bangladeshi industries. Keywords: Capital structure, Leverage, Firm’s specific factors, Dhaka Stock Exchange Bangladesh.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
This paper investigates the relationship between working capital management and financial performance of Pharmaceuticals and Textile firms listed at the Dhaka Securities Exchange in Bangladesh. The data analysis was carried on ten Pharmaceuticals and Textile firms for a period of 2013 to 2017. Secondary Data was analyzed by applying Descriptive Statistics, Regression and Correlation analysis to findthe relationship of current ratio, inventory conversion period and average payment period with Return on Asset. The findings indicate that the Pharmaceuticals and Textile firms’ performance is influenced by the variables relating to working capital. There is a positive relationship between profitability and current ratioand Inventory Turnover period shows a negative relationship with profitability but Average payment period shows insignificant impact on profitability. The study concludes that there exists a relationship between working capital managementand financial performance of Pharmaceuticals and Textile firms in Bangladesh. The study recommends that for the Pharmaceuticals and Textile firms to remain profitable, they should employ working capital management practice that will help in making decisions about investment mix and policy, matching investment to objective, asset allocation for institution and balancing risk against profitability.
Mercer Capital | Valuation Insight | Capital Structure in 30 MinutesMercer Capital
Capital structure decisions have long-term consequences for shareholders. Directors evaluate capital structure with an eye toward identifying the financing mix that minimizes the weighted average cost of capital. This decision is complicated by the iterative nature of capital costs: the financing mix influences the cost of the different financing sources. While the nominal cost of debt is always less than the nominal cost of equity, the relevant consideration for directors is the marginal cost of debt and equity, which measures the impact of a given financing decision on the overall cost of capital. The purpose of this whitepaper is to equip directors and shareholders to contribute to capital structure decisions that promote the financial health and sustainability of the company.
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
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1. American International Journal of Business Management (AIJBM)
ISSN- 2379-106X, www.aijbm.com Volume 3, Issue 7 (July 2020), PP 14-19
*Corresponding Author: Anisa Ramadinar1
www.aijbm.com 14 | Page
Active Adjustment towards Target Capital Structure of
Consumer Goods Firms
Anisa Ramadina1
, Subiakto Soekarno2
1
(School of Business and Management, Institut Teknologi Bandung, Indonesia)
2
(School of Business and Management, Institut Teknologi Bandung, Indonesia)
*Corresponding Author: Anisa Ramadina1
I. INTRODUCTION
The contents of each section may be provided to understand easily about the paper. As one of the
highly debated topics of financial decision-making, the structure of capital is important because it corresponds
to certain variables of financial decision-making, such as dividend payment, project funding, acquisition or
mergers, buyout and more. If the financial condition of the firm is affected by the financial deficit, the financial
manager has the responsibility of tackling both the financial and management decisions to ensure that the
viability of the firm is maintained. We can therefore say that capital structure decisions or capital restructuring
decisions, in particular debt restructuring decisions, are the basis of several corporate finance decisions. Ignoring
all of them in the decision-making phase of corporate finance is very difficult. The financial manager has the
main goal of increasing the resources of the shareholders at the lowest cost of capital. Thus, in order to achieve
this goal, a company may choose from a range of investment options to finance its assets and is called the
company's capital structure. Therefore, the point at which the lowest cost of capital is achieved is known to be
the optimal capital structure.
In fact, the financial structure consists of the bonds and equities utilized by the organization to fund
their operations (Ross, Westerfield & Jaffe, 2009). Financial decisions must be precise according to the
condition of the firm because if it is not or done incorrectly, a high cost of capital could be spent on the firm,
leading to low profits. The allocation of capital would also affect public companies' net profits, debt and
liabilities. To identify the correct composition, the theory of pecking order theory, trade-off theory and theory of
agency cost affects several factors on the capital structure. Decisions on the capital structure must be based on
the current situation. Managers have to know and identify several variables of factors that affect the structure of
capital when making decisions as the determinants of the capital structure differ for every industry and heavily
influenced by the company current situation. It is also important to understand how managers adjust the capital
structure of the company to maximize value, to achieve an optimal capital structure.
Over the years, the consumer goods industry sector has been one of the sectors with the highest
growing sector in Indonesia. As one of the fastest growing markets, companies may seek the utilization of
external financing, for instance equity or debt, which likely influence the capital structure. The consumer goods
industry is less resource intensive than the other manufacturing industries, but also needs tremendous expertise
and large costs for the distribution and branding of goods.
ABSTRACT:- Indonesia has one of the most competitive and fastest growing consumer goods markets in the
world. Even though the consumer goods industry is less resource intensive than the other manufacturing
industries, they still need tremendous expertise and large costs for the distribution and branding of goods. As the
consumer goods industries continue to grow, the companies may seek to use external financing, such as equity or
debt, to maximizes the firm’s value which will influence the capital structure. When managers prioritize to
maximizes the firm’s value, it is expected that there is an optimal target capital structure they want to achieve.
Managers may or may not adjusted the capital structure toward the target. The speed of adjustment can be caused
by the managers actively or passively adjusting the capital structure. This study will explore the existence of
optimal capital structure and whether the managers actively adjust toward the target.
KEYWORDS:- Active Adjustment, Capital Structure, Consumer Goods Industry, Partial Adjustment, Speed of
Adjustment.
2. Active Adjustment Towards Target Capital Structure of Consumer Goods Firms
*Corresponding Author: Anisa Ramadinar1
www.aijbm.com 15 | Page
This condition leads to the question of whether the managers applied the target optimal capital structure in the
consumer goods firms. If managers move to achieve the ideal capital structure, there will be adjustment cost and
the adjustment speed. It is still unknown whether the managers utilize the active adjustment or passive
adjustment. The active adjustment is done when the managers actively retrieve the capital market and distribute
the dividend of the companies. There has been no research regarding the active adjustment in consumer goods
firms in Indonesia.
II. LITERATURE REVIEW
2.1. Capital Structure
The percentage of debt or/and equity that the corporations used to sustain their assets and daily
activities is called capital structure. It is commonly either a total debt to total equity ratio or a total debt to
capital ratio. The contractual claim on a company refers to a debt instrument. Also, a firm could be under
pressure from debt that resulted from tax benefits. On the other hand, equity is the claim of ownership on a
company. The issuance of both equity and debt exerts both merits and demerits on the particular firm.
According to Modigliani and Miller (1963) debt leads to lower taxes resulting from the reduction in
interests paid. As such, debt increases leverage thus increasing the valuation of a stock while also maximizing
on the firm’s indebtness. Still, any debt incurred by a firm result to a higher risk on the firm. A spike in the debt
of a firm increases the financial distress of the particular firm thus increasing its risk of insolvency. Van Horne
& Wachowicz (2008) stated that a practical approach of debt financing would require the firm to optimize the
merits of debt while also significantly lowering the levels of risk.
2.2. Modigliani-Miller Theory
The first capital structure theory is from Modigliani-Miller. The Modigliani-Miller theory is composed
of two propositions that advance to the capital structure theory. The two propositions share common
assumptions, for instance, the lack of both transaction costs and taxes. Also, the capital market offers similar
interest rates for both individuals and companies. According to Proposition I, both levered and unlevered firms
have equal valuations. According to Proposition II, WACC has no impact on a firm’s leverage. A re-evaluation
of the Modigliani-Miller theory in 1963 led to the inclusion of the assumption of taxes that stipulates that debt
effectively reduce the taxes of a firm. A 100% debt financing maximizes the valuation of the particular firm thus
optimizing the capital structure.
2.3. Trade-Off Theory
The trade-off theory modifies the Modigliani-Miller theory. This theory explains the concept of tax
saving arising from debt financing, financial distress, reduced agency costs, and bankruptcy costs (Myers,
1984). The trade-off theory does not put into consideration the fact that debt is negatively correlated to
probability (Agha et al., 2013). Static and dynamic models consist of the categories of this theory at hand. An
assumption of the use of the capital structure that trades off debt and equity against their respective and
combined benefits refers to the static trade-off theory (Agha et al., 2013). As such, companies are able to
optimize their valuations. Debt is merited with providing a debt tax shield. A lot of debt financing puts a firm
into the risk of financial distress. According to studies by Marsh (1982), Korajczyk & Levy (2003), and
Hovakimian & Tehranian (2004), underscored that target leverage is essential to a firm. Still, Rajan & Zingales
(1995), Titman & Wessels (1988), and Fama & French (2002) established that low levels of debt lead to high
levels of profitability. Firms that use debt conservatively usually have higher profitability coupled with little
financial distress.
The static trade-off theory and the dynamic trade-off theory both influence the speed of adjustment. An
adjustment will occur instantly when the capital structure does not optimize according to the static trade-off. As
such, optimal level is the most preferred condition of the capital structure according to the static trade-off. The
specific speed of adjustment (SOA) optimizes the capital structure yearly on a partial level as per the dynamic
trade-off theory. Also, firms change the capital structure frequently (Flannery & Rangan, 2006; Faulkender et
al., 2012). However, according to Baker & Wurgler (2002), the capital structure is not actively adjusted by
firms. Indonesia’s SOE is relatively slower than in other regions of the world (Soekarno & Prayogo, 2018).
Fundamental reasons influence the high heterogeneity of in SOA according to Flannery & Hankins (2007).
Variable factors such as different tax structures, institutions, economic conditions, and governance policies offer
some explanation to the heterogeneity of the SOA among countries (Antoniou et al. 2008).
3. Active Adjustment Towards Target Capital Structure of Consumer Goods Firms
*Corresponding Author: Anisa Ramadinar1
www.aijbm.com 16 | Page
According to Faulkender et al. (2012), an adjustment cost exists whenever there is an adjustment to the capital
structure. Such an adjustment will be to ensure that the firms achieve their optimal capital structure. As such,
there exists both passive and active capital structure adjustments. The passive adjustment is when the managers
incurred the net income to the retained earnings, meanwhile the active adjustment is when the managers access
the capital market, even if it is only to pay the dividend to the shareholders. The dynamic capital structure model
will be employed in this study to monitor the adjustments incurred when achieving an optimal capital structure.
2.4. Pecking Order Theory
The pecking order theory was expounded by Myers and Maljuf in 1984. As per the pecking order
theory, companies operate under a hierarchy of financial preference; the presence of asymmetrical information
makes internal financial more preferred to external financing. Also, asymmetric information is the cause of false
valuation of a firm that may lead to an undervaluation of a company. Mispriced valuation results from poor
communication of managers on their firms’ valuations. Equity are mispriced in equity financing. Debt is
mispriced in debt financing. According to Myers, internal financing is more advantageous when a firm is
additional financing. According to Rajan & Zingales (1995), Titman & Wessels (1988), and Fama & French
(2002) firms which have incurred low debts are usually associated with high levels of profit. On the other hand,
as per, Leary & Roberts (2010), the pecking order theory is not providing a substantial metric for the evaluation
of the decisions to be taken by a firm during its financing.
III. METHODOLOGY
The data for this research is obtained from 32 consumer goods Indonesia listed firms from the year
2008 until 2018. The reason for this is because the information availability of the listed firms and easy capital
market access. The variables used in this research are profitability, liquidity, tangibility, firm size, growth
opportunities, non-debt tax shield, and dividend policy. The research will use the unbalanced panel data because
of the inadequate data from each company.
The model for this research is the dynamic trade-off theory. The notion of targets among companies that
maximize their profits is emphasized by the dynamic trade-off theory. The target adjustment hypothesis
is provided through the framework of Frank & Goyal (2009);
(1)
Then, the equation below will represent the firm’s determinants of capital structure,
(2)
The research then developed by Indonesian researcher, Soekarno and Prayogo (2018). In order to eliminate the
portion of passive adjustment pace, Soekarno and Prayogo (2018) have already changed the model to consider
the company's net profit as the initial leverage. The following is the equation for estimating the effect of
research variable on capital structure:
(3)
The will represent the portion of only the active adjustment. To calculate the leverage without the passive
adjustment, the leverage will be calculated using the long-term debt to total assets and the net income of the
companies. This is because in the active adjustment model the net income supposedly have already incurred in
the initial leverage. The coefficient of the variables will be represented by ( ) and the active adjustment speed to
achieve the capital structure is indicated as . The value of should be between 0 and 1. The Generalized
Method of Moments (GMM) will be used to estimates the model because of it yields adequate estimation that
could overcomes the potential biases, error in measurement, and lagged dependent variable presence in the
model.
IV. DISCUSSION
Based on the Table 1.1, the regression findings indicate that multiple independent variables have
significant relationships with the dependent variable. When the value P>|z| is smaller than the significance level
of 0.05 there is a significance level of effect. The variables that have significance level of influence are lagged
profitability, lagged tangibility, lagged liquidity, lagged firm size, and lagged non-debt tax shield.
4. Active Adjustment Towards Target Capital Structure of Consumer Goods Firms
*Corresponding Author: Anisa Ramadinar1
www.aijbm.com 17 | Page
Table 1: Results of the Regression
Table 2: Results Comparison
The lagged profitability is found to be significant toward the active capital structure adjustment, which
is a contrast to previous studies. This indicates that total net income which is the proxy for profitability
significantly affect the capital structure active adjustment. It can be interpreted that funding internally
significantly caters to the operations and investment activities of such companies.
Trade-off theory and pecking order theory support the findings that lagged tangibility is positively
significant to capital structure. The significant correlation means that the presence of net fixed asset is important
in the active adjustment. It is said that the fixed asset could be utilize as a guarantee. This means that the firms
that holds more net fixed assets encourages them to hold high levels of leverage.
The lagged liquidity holds a significant association with the active adjustment. As the proxy of
liquidity, current assets are greatly influencing the capital structure. This is because the high current assets
reflect the condition of a highly liquid firm, that means they are able to repay their debt. The companies that
produce consumer goods and with prominent amounts of liquidity fancy internal funding for the funding of both
their operational and investment activities.
The lagged non-debt tax shield also holds a significant association with the active adjustment. This
indicates that the presence of depreciation has a strong influence for active capital structure adjustment. It can be
interpreted that the tax benefit from depreciation can substitute the tax benefit from the debt or leverage. The
firms will hold lower leverage or have less debt due to the high depreciation level.
Lagged firm size is identified to have a significant association toward capital structure active
adjustment. The total assets which represented the firm size measurement has a significant input, which means
small costs of equity financing are present in large firms. This also proves that the large firms incline to have a
better access toward capital market, and they will incline to have more leverage or debt.
As per the dynamic trade-off theory, to achieve the optimal capital structure it will generate an
adjustment cost for the company. When the adjustment cost is less than the benefit formed by the adjustment,
the companies will attempt to adjust their capital structure toward the ideal or optimal level. The cost and benefit
of the adjustment will be signified through the speed of adjustment. The coefficient (1− ) of lagged leverage
displayed the value of 0.3877342, which means that the speed of active adjustment ( ) is 0.6122658 or 61.23%.
The speed of adjustment indicates that most of the consumer goods industry on Indonesia adjust their leverage
actively. These results prove that the managers do adjust the capital structure actively through the method of
dividend payment or accessing the capital market. As for the period of adjustment, the firms will need
5. Active Adjustment Towards Target Capital Structure of Consumer Goods Firms
*Corresponding Author: Anisa Ramadinar1
www.aijbm.com 18 | Page
approximately 1.9312 years or around 2 years for firms to close the gap of capital structure. Below is the figure
for the visualisation of the speed of adjustment.
Figure 1: Speed of Adjustment Visualisation
V. CONCLUSION
The results of the study acknowledged that the consumer goods industry indeed have an optimal target
capital structure, which is consistent with the trade-off theory. The determinants that affect the capital structure
of the firms are liquidity, tangibility, profitability, non-debt tax shield, and firm size. The results also indicate
that the managers do adjust the capital structure actively with a relatively fast speed of adjustment. Consumer
goods firms have a speed of 61.23% per year. The firms will achieve the optimal capital structure target within
only 2 years.
The results of this study are contradictory with the previous researches. The previous studies have
found that firms mostly done the passive adjustment. For this research, this means that the consumer goods
industry firms might have benefited from the low cost of adjustment and the optimal capital research. Further
research can investigate the source of the adjustment cost and the active adjustment in other industry or sector.
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*Corresponding Author: Anisa Ramadina1
1
(School of Business and Management, Institute Technology Bandung, Indonesia)