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出处：Abor J. The effect of capital structure on profitability: an empirical analysis of listed firms in Ghana[J]. Journal of Risk Finance, 2005, 6(November):438-445.
外文翻译
The effect of capital structure on profitability : an empirical analysis of listed firms in Ghana
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cosplay什么意思 Author:Joshua Abor
Introduction
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The capital structure decision is crucial for any business organization. The decision is important becau of the need to maximize returns to various organizational constituencies, and also becau of the impact such a decision has on a firm’s ability to deal with its competitive environment. The capital structure of a firm is actually a mix of different curitiworthless
melania trumpes. In general, a firm can choo among many alternative capital structures. It can issue a large amount of debt or very little debt. It can arrange lea financing, u warrants, issue convertible bonds, sign forward contracts or trade bond swaps. It can issue dozens of distinct curities in countless combinations; however, it attempts to find the particular combination that maximizes its overall market value.
A number of theories have been advanced in explaining the capital structure of firms. Despite the theoretical appeal of capital structure, rearchers in financial management have not found the optimal capital structure. The best that academics and practitioners have been able to achieve are prescriptions that satisfy short-term goals. For example, the lack of a connsus about what would qualify as optimal capital structure has necessitated the need for this rearch. A better understanding of the issues at hand requires a look at the concept of capital structure and its effect on firm profitability. This paper examines the relationship between capital structure and profitability of companies listed on the Ghana Stock Exchange during the period 1998-2002. The effect of capital structure on the profitability of listed firms in Ghana is a scientific area that has not yet be
what s upen explored in Ghanaian finance literature.
The paper is organized as follows. The following ction gives a review of the extant literature on the subject. The next ction describes the data and justifies the choice of the variables ud in the analysis. The model ud in the analysis is then estimated. The subquent ction prents and discuss the results of the empirical analysis. Finally, the last ction summarizes the findings of the rearch and also concludes the discussion.
Literature on capital structure
The relationship between capital structure and firm value has been the subject of considerable debate. Throughout the literature, debate has centered on whether there is an optimal capital structure for an individual firm or whether the proportion of debt usage is irrelevant to the individual firm’s value. The capital structure of a firm concerns the mix of debt and equity the firm us in its operation. Brealey and Myers (2003) contend that the choice of capital structure is fundamentally a marketing problem. They state that the fi
rm can issue dozens of distinct curities in countless combinations, but it attempts to find the particular combination that maximizes market value. According to Weston and Brigham (1992), the optimal capital structure is the one that maximizes the market value of the firm’s outstanding shares.
Fama and French (1998), analyzing the relationship among taxes, financing decisions, and the firm’s value, concluded that the debt does not concede tax benefits. Besides, the high leverage degree generates agency problems among shareholders and creditors that predict negative relationships between leverage and profitability. Therefore, negative information relating debt and profitability obscures the tax benefit of the debt. Booth et al. (2001) developed a study attempting to relate the capital structure of veral companies in countries with extremely different financial markets. They concluded that the variables that affect the choice of the capital structure of the companies are similar, in spite of the great differences prented by the financial markets. Besides, they concluded that profitability has an inver relationship with debt level and size of the firm. Graham (2000) concluded in his work that big and profitable companies prent a low debt rate. M
esquita and Lara (2003) found in their study that the relationship between rates of return and debt indicates a negative relationship for long-term financing. However, they found a positive relationship for short-term financing and equity.
Hadlock and James (2002) concluded that companies prefer loan (debt) financing becau they anticipate a higher return. Taub (1975) also found significant positive coefficients for four measures of profitability in a regression of the measures against debt ratio. Petern and Rajan (1994) identified the same association, but for industries. Baker (1973), who worked with a simultaneous equations model, and Nerlove (1968) also found the same type of association for industries. Roden and Lewellen (1995) found a significant positive association between profitability and total debt as a percentage of the total buyout-financing package in their study on leveraged buyouts. Champion (1999) suggested that the u of leverage was one way to improve the performance of an organization.
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study mathIn summary, there is no universal theory of the debt-equity choice. Different views have b
电解电容英文een put forward regarding the financing choice. The prent study investigates the effect of capital structure on profitability of listed firms on the GSE. comparewith
