Impact of capital structure on firm’s value: Evidence from Bangladesh
Modigliani & Miller (1958) show the impact of debt-equity ratio on firm value in their capital structure theory. Economist and financial researchers have spent time to develop new thoughts around this theory. Despite their effort the Modigliani & Miller (MM) model is still in vague. In this paper attempt has been made to empirically support the argument of MM. The paper tests the influence of debt-equity structure on the value of shares given different sizes, industries and growth opportunities with the companies incorporated in Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) of Bangladesh. For the robustness of the analysis samples are drawn from the four most dominant sectors of industry i.e. engineering, food & allied, fuel & power, and chemical & pharmaceutical to provide a comparative analysis. A strong positively correlated association is evident from the empirical findings when stratified by industry.
Volume (Year): 3 (2010)
Issue (Month): 3 (October)
|Contact details of provider:|| Web page: http://academicpublishingplatforms.com/journal.php?journal=BEH|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- MacKie-Mason, Jeffrey K, 1990.
" Do Taxes Affect Corporate Financing Decisions?,"
Journal of Finance,
American Finance Association, vol. 45(5), pages 1471-93, December.
When requesting a correction, please mention this item's handle: RePEc:pdc:jrnbeh:v:3:y:2010:i:3:p:111-122. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jaroslav Holecek)
If references are entirely missing, you can add them using this form.