The effect of capital structure change on the valuation of companies

Title: The effect of capital structure change on the valuation of companies
Creator: Rodrigs, Marcus Craig
Relation: Innovation in Management Practices p. 260-266
Relation: Macmillan Advanced Research Series
Relation: http://www.macmillanindia.com/book-details.asp?page=&pagenum=&bookid=3430
Publisher: Macmillan Publishers India
Resource Type: book chapter
Date: 2008
Description: This paper tests one of DeAngelo and Masulis' hypotheses to predict whether a leverage change will affect the market value of the firm by analyzing the relationship between debt in the capital structure of a company and its valuation on a sample of Indian companies. The results show a mix of both negative and positive correlation between the leverage and valuation variable. However, even in the years with negative correlation, the coefficients are low and the inference is that leverage does have a valuation impact. This conclusion is reinforced by the fact that the firm level time series analysis shows that the majority of the companies in the study have positive correlation.
Subject: India; capital structure; companies; valuation; leverage
Identifier: http://hdl.handle.net/1959.13/804687
Identifier: uon:6700
Identifier: ISBN:9780230637160
Language: eng

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