This study examines the determinants of capital structure for 15 publicly traded Egyptian companies over 3 years from 2008-2010. Multiple regression analysis was used to analyze the relationship between debt ratio (dependent variable) and five independent variables: tangibility, liquidity, profitability, growth, and size. The results found a significant negative relationship between debt ratio and liquidity, as measured by quick ratio. No other significant relationships were found between debt ratio and the other independent variables. The study contributes to understanding capital structure determinants in the Egyptian market.
An Empirical Assessment of Capital Asset Pricing Model with Reference to Nati...ijtsrd
"This study concentrates on empirical assessment of Capital Asset Pricing Model CAPM on the National Stock Exchange NSE . CAPM assists to determine a well diversified portfolio. The main objective of this research paper is to check the applicability of Nobel laureate’s model in Indian equity market by testing the relationship between risk and return, whether there is any direct proportionality in the expected rate of return and its systematic risk. It relates its results by using the beta systematic risk as a measuring factor. The study was being conducted for a period of 260 weeks from 7 April 2013 to 25 March 2018. 45 companies from NSE were picked as a proxy for the market portfolio. This research was done by using regression analysis on stocks and portfolio to find out the final results. Research of this study nullifies that this model is applicable to the Indian market and also contradicts its expected return and systematic risk which are linearly related to each other. Miss. Yashashri Shinde | Miss. Teja Mane ""An Empirical Assessment of Capital Asset Pricing Model with Reference to National Stock Exchange"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Special Issue | Fostering Innovation, Integration and Inclusion Through Interdisciplinary Practices in Management , March 2019, URL: https://www.ijtsrd.com/papers/ijtsrd23105.pdf
Paper URL: https://www.ijtsrd.com/management/public-sector-management/23105/an-empirical-assessment-of-capital-asset-pricing-model-with-reference-to-national-stock-exchange/miss-yashashri-shinde"
En el marco del Seminario Financiero de la UdeA, apoyado por el Grupo de Investigación en Finanzas GIFI-, Ignacio Arango, especialista en gerencia financiera presentó la conferencia "El impacto de los comunicados de prensa sobre la liquidez de la bolsa colombiana".
Más info.:
Facultad de Ciencias Económicas
Universidad de Antioquia
http://economicas.udea.edu.co/
comunicacioneseconomicas@udea.edu.co
Fijo: (57 4 ) 219 88 05-219 58 00
Medellín
Stock Prices valuation of IT Companies in India: An Empirical Study Dr.Punit Kumar Dwivedi
In this paper, we would like to answer the questions such as
Is it worthwhile investing in such software companies?
Will capital appreciation of software companies continue in the future?
It is important to analyze whether investors will be benefitted by investing in this software industry or whether software companies’ outperformance over other industries is just the temporary phase. Finally, we would like to suggest our recommendations over software industries whether investors should buy/sell/hold the stock of these companies based on our analysis.
This presentation demonstrates that how economic concepts and/or econometric techniques can be useful in financial decision making (i.e. trading) and that how EViews can effectively handle the whole process.
The past couple of decades have seen a significant shift from active to passive investment strategies. We examine how this shift affects financial stability through its impacts on:
(i) funds’ liquidity and redemption risks,
(ii) asset-market volatility,
(iii) asset-management industry concentration, and
(iv) comovement of asset returns and liquidity.
Overall, the shift appears to be increasing some risks and reducing others. Some passive strategies amplify market volatility, and the shift has increased industry concentration, but it has diminished some liquidity and redemption risks. Finally, evidence is mixed on the links between indexing and comovement of asset returns and liquidity
An Empirical Assessment of Capital Asset Pricing Model with Reference to Nati...ijtsrd
"This study concentrates on empirical assessment of Capital Asset Pricing Model CAPM on the National Stock Exchange NSE . CAPM assists to determine a well diversified portfolio. The main objective of this research paper is to check the applicability of Nobel laureate’s model in Indian equity market by testing the relationship between risk and return, whether there is any direct proportionality in the expected rate of return and its systematic risk. It relates its results by using the beta systematic risk as a measuring factor. The study was being conducted for a period of 260 weeks from 7 April 2013 to 25 March 2018. 45 companies from NSE were picked as a proxy for the market portfolio. This research was done by using regression analysis on stocks and portfolio to find out the final results. Research of this study nullifies that this model is applicable to the Indian market and also contradicts its expected return and systematic risk which are linearly related to each other. Miss. Yashashri Shinde | Miss. Teja Mane ""An Empirical Assessment of Capital Asset Pricing Model with Reference to National Stock Exchange"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Special Issue | Fostering Innovation, Integration and Inclusion Through Interdisciplinary Practices in Management , March 2019, URL: https://www.ijtsrd.com/papers/ijtsrd23105.pdf
Paper URL: https://www.ijtsrd.com/management/public-sector-management/23105/an-empirical-assessment-of-capital-asset-pricing-model-with-reference-to-national-stock-exchange/miss-yashashri-shinde"
En el marco del Seminario Financiero de la UdeA, apoyado por el Grupo de Investigación en Finanzas GIFI-, Ignacio Arango, especialista en gerencia financiera presentó la conferencia "El impacto de los comunicados de prensa sobre la liquidez de la bolsa colombiana".
Más info.:
Facultad de Ciencias Económicas
Universidad de Antioquia
http://economicas.udea.edu.co/
comunicacioneseconomicas@udea.edu.co
Fijo: (57 4 ) 219 88 05-219 58 00
Medellín
Stock Prices valuation of IT Companies in India: An Empirical Study Dr.Punit Kumar Dwivedi
In this paper, we would like to answer the questions such as
Is it worthwhile investing in such software companies?
Will capital appreciation of software companies continue in the future?
It is important to analyze whether investors will be benefitted by investing in this software industry or whether software companies’ outperformance over other industries is just the temporary phase. Finally, we would like to suggest our recommendations over software industries whether investors should buy/sell/hold the stock of these companies based on our analysis.
This presentation demonstrates that how economic concepts and/or econometric techniques can be useful in financial decision making (i.e. trading) and that how EViews can effectively handle the whole process.
The past couple of decades have seen a significant shift from active to passive investment strategies. We examine how this shift affects financial stability through its impacts on:
(i) funds’ liquidity and redemption risks,
(ii) asset-market volatility,
(iii) asset-management industry concentration, and
(iv) comovement of asset returns and liquidity.
Overall, the shift appears to be increasing some risks and reducing others. Some passive strategies amplify market volatility, and the shift has increased industry concentration, but it has diminished some liquidity and redemption risks. Finally, evidence is mixed on the links between indexing and comovement of asset returns and liquidity
this power point includes some important topics in the stock market like ( criteria to invest on long term , volatility , stock market stages ,reducing risk )
The Effect of Capital Structure on Profitability of Energy American Firms: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.
The Cost of Capital, Corporation Finance and The Theory of InvestmentRaju Basnet Chhetri
Franco Modigliani, Professor of Economics, and Merton H. Miller, Associate Professor of Economics, Graduate School of Industrial Administration, Carnegie Institute of Technology.
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
Using data of listed firms on Hochiminh Stock Exchange, the study examines the impact of free cashflowson firm performance of manufacture, trade and real estates sectors. The findingsconsistently show that free cashflowshave a positive effect on firm performance for all sectors. However, the impact of free cashflows on firm performanceis different between firms with and without investment opportunities. This shows the relevance of Jensen's free-cashflows theory (1986) to listed Vietnamese firms at thesectoral level.
Corporate debt policy remained a significant, but a challenging decision for managers entrusted with the responsibility to improve the value of the firm. Thus, this study examines the factors influencing the capital structure decisions of firms in Nigeria. The study employs a panel data regression model to analyze data from firms in Nigeria for the period 2011 to 2015. The result of the empirical analysis reveals that firms in Nigeria have a preference to finance economic operations from retained earnings and the use of short-term debt on rollover basis. The finding of this study confirms that debt decreases with profitability and growth opportunities. The findings show that asset tangibility and firm size have a positive and significant relationship with debt policy of firms in Nigeria. The analysis also reveals that managerial ownership has a negative and significant relationship with debt ratio of firms in Nigeria. The study shows a non-significant positive relationship between non-debt tax shields and debt. The study demonstrates that the trade-off and pecking order theories both explains the factors influencing capital structure decisions of firms in Nigeria. Therefore, this study suggests the need for stakeholders to develop the financial markets and make it accessible for firms to obtain long-term financing for economic growth and development.
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.
The impact of working capital management on firm profitability in different b...Rifat Humayun
This paper investigates the effect of the business cycle on the link between working capital, the difference between current assets and current liabilities, and corporate performance.
Efficient working capital management is recognized as an important aspect of financial management practices in all organizational forms.
In acknowledgement of this importance, the CFO Magazine publishes an annual study of corporate working capital management performance in many countries.
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.
Determinants of Capital Structure: A Study on Some Selected Corporate Firms i...
Capital Structure
1. The Relationship between Capital Structure and
Firm’s Characteristics: An Empirical Study on
Egypt Stock Exchange
Abdulhadi Alsheikh
Supervised by
Prof.Dr. Hatem Altaee
Prof.Dr. Khaled AlJaefari
July 2011
1
2. The Objective of the Research
The objective of the research is to provide
some features and determinants of the capital
structure through the previous studies of
capital structure and to examine these
determinants of capital structure on a sample
of 15 Egyptian companies, we will show what
the most determinate is in common with other
studies that done in middle east market and
other international markets
2
3. Contributions to the Research:
• It would provide empirical evidence to
measure the determinants of capital structure
in a growing market like Egypt.
• This study contributes to the literature by
focusing only on three major sectors of the
economy (Industry, Telecommunications, and
Constructions )
3
4. Limitations of the Research
• This paper studies examines the determinants of
capital structure for only three years, due to the
limited availability of data in Egypt stock exchange.
• Since the financial sectors have high leverage ratios
like financial firms (Banks, and insurance companies)
we exclude these companies from our research and
we rely on non financial sectors (Industry,
Telecommunications, and Constructions).
4
5. Literature Review
Asadi & Ravari (2009) indicate a further empirical evidence of the theories of
capital structure and try to examine the factors that affect Debt ratios in
Islamic Republic of Iran. They used data from Tehran Stock Exchange (TSE)
for five years from 2003 to 2007.They analysis 1000 observations to
examine which capital structure theory can be strongly supported for
private and public companies, there were nine hypotheses which had
been developed to do the test of the relationship between debt ratios and
explanatory variables such as growth opportunity, profitability, tangibility
and size (measured by Sales). The results of OLS regression show that
there is a significant negative relationship between profitability and Debt
ratios. The relationship between growth opportunity and Debt ratios is
significantly positive and there is a significant negative relation between
tangibility and short-term debt and total debt ratios but for long-term
debt ratio the relation is positive. The relationship between size and
leverage ratios is different for private and public companies and it isn’t
significant. 5
6. Literature Review
Gaud, Jani, Hoesli & Bender (2003) showed that the determinants of the
capital structure were analyzed for a panel data consisted of 106 Swiss
companies listed in the Swiss stock exchange. The analysis was performed
for ten years (1991-2000). They used multiple regression in the analysis,
the variables: leverage as dependent variable (growth, size, profitability,
tangibles, operating risk which means that when leverage increase lead to
volatility of the net profit, firms that have high operating risk can lower
the volatility of the net profit by reducing the level of debt) as
independents variables. The results of the paper was : the size of
companies, the importance of tangible assets and business or operating
risk are positively correlated to leverage, while growth and profitability
are negatively associated with financial leverage. Based on the analysis
and results it suggested that both the pecking order theory and trade off
hypothesis were confirmed in explaining the capital structure of Swiss
companies.
6
7. Literature Review
Modigliani and Miller (1958) was the first in to demonstrate algebraically the
effect of capital structure on firm value. It forms the basis for modern
thinking on capital structure, though it is generally viewed as a purely
theoretical result since it disregards many important factors in the capital
structure decision. The theorem states that, in a perfect market, how a
firm is financed is irrelevant to its value. This result provides the base with
which to examine real world reasons why capital structure is relevant,
that is, a company's value is affected by the capital structure it uses. Some
other reasons include bankruptcy cost, agency cost, and taxes This
analysis can then be extended to look at whether there is in fact an
optimal capital structure, the one which maximizes the value of the firm.
For example, Modigliani and Miller (1963) took taxation system under
consideration and they proposed that firms could achieve its optimal
capital structure by using more debt in their balance sheet. According to
Miller, the value of the firm depends on the relative height as a
percentage of each tax rate. 7
8. Hypotheses
First Hypothesis
H0: There is a significant negative or no relationship between debt ratio of
the firms and percentage of fixed assets to total assets.
H1: There is a significant positive relationship between debt ratio of the firms
and percentage of fixed to total asset.
Second Hypothesis
Ho: There is a significant positive or no relationship between debt ratio of the
firms and their quick ratio.
H1: There is a significant negative relationship between debt ratio of the
firms and their quick ratio.
8
9. Hypotheses
Third Hypothesis
Ho: There is a significant negative or no relationship between debt ratio of
the firms and the size of the firms.
H1: There is a significant positive relationship between debt ratio of the firms
and the size of the firms.
Fourth Hypothesis
H0: There is a significant positive or no relationship between the debt ratio
of the firms and their growth of earnings.
H1: There is a significant negative relationship between the debt ratio of the
firms and their growth of earnings.
9
10. Hypotheses
Fifth Hypothesis
H0: There is a significant positive or no relation between debt
ratio of the firms and their profitability.
H1: There is a significant negative relationship between debt
ratio of the firms and their profitability
10
11. Research Methodology and Sampling
This study depends on descriptive and analytical
methodology, it describes past studies that related
to, and analyzes the results of field research.
We select our representative sample which
consists of 15 publicly traded Egyptian companies
over 3 years (2008-2010). We will use the regression
analysis model to study the relationship between
firm’s characteristics on Debt/Asset Ratio.
Applying multiple regression model, SPSS
11
12. Dependent and Independent Variables
• Debt ratio, as measured by debt to total assets
represents (dependent variable). For independent
variables, however, only five independent variables
are taken, and they are:
• Tangibility (Fixed assets / total assets)
• Liquidity(quick ratio)
• Profitability(Net Income / Total Asset) or ROA
• Growth (Log Total Assets)
• Size ( Log Sales)
12
13. The general form of our model is
Where:
LG = Leverage
TG = Tangibility of assets
QR= Quick ratio
SZ = Size
GT = Growth
PF= Profitability
ε = The error term
13
14. Results & Analysis
Table (1)
Model Summaryb
Adjusted R Std. Error of the
Model R R Square Square Estimate
1 .748a .560 .504 .141230
a. Predictors: (Constant), Growth, Profitability, Tangibility, Quick
Ratio, Sales
b. Dependent Variable: Debt Ratio
14
15. Results & Analysis
Table (2)
Descriptive Statistics(2008-2010)
N Minimum Maximum Mean Std. Deviation
Debt Ratio 45 .029 .774 .33882 .200466
Tangibility 45 .264 .899 .59182 .184943
Profitability 45 .002 .335 .09669 .081486
Quick Ratio 45 .262 5.925 1.23438 .987667
Sales 45 1.531 4.465 3.48031 .656656
Growth 45 2.722 4.743 3.72669 .609438
Valid N (listwise) 45
15
16. Results & Analysis
Table(3)
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) .188 .153 1.230 .226
Tangibility -.050 .155 -.047 -.326 .747
Quick Ratio -.071 .026 -.352 -2.719 .010
Profitability -.727 .327 -.296 -2.222 .032
Sales .189 .086 .620 2.210 .033
Growth -.086 .097 -.261 -.885 .381
a. Dependent Variable: Debt Ratio
16
17. Conclusion
The findings show that there a negative
relationship between financial leverage and
tangibility of assets, liquidity, profitability, and
growth. Size of the firm appears to have a
positive relationship with the financial
leverage. However, only the relationships with
liquidity, profitability, and size of the firm are
statistically significant
17