A COMPARISON OF HOW DETERMINANTS OF CAPITAL STRUCTURE AFFECT LEVERAGE AND SHARE PRICE: EVIDENCE ON UK FIRMS.
This study seeks to determine how various capital structure determinants affect leverage and share price from 2009-2013. I will use FTSE 350 companies and will focus on sectors such as Aerospace & Defence, Beverages, Construction & Materials, Food & Drugs retailers, Household Goods, Mobi...
| Main Author: | |
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| Format: | Dissertation (University of Nottingham only) |
| Language: | English |
| Published: |
2014
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| Online Access: | https://eprints.nottingham.ac.uk/27411/ |
| _version_ | 1848793365221474304 |
|---|---|
| author | Mbatia, Joy |
| author_facet | Mbatia, Joy |
| author_sort | Mbatia, Joy |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | This study seeks to determine how various capital structure determinants affect leverage and share price from 2009-2013. I will use FTSE 350 companies and will focus on sectors such as Aerospace & Defence, Beverages, Construction & Materials, Food & Drugs retailers, Household Goods, Mobile telecommunications, Support services, Technology & Hardware Equipment and Travel & Insurance. I will test various determinants such as liquidity, profitability, size, tangibility, growth, age, non-debt tax shields and business risk.
Using correlation analysis and fixed effect regression estimation model, I established a relationship between determinants and leverage then a relationship between the determinants and share price. The relationships are then analysed and compared to each other. While Liquidity, non-debt tax shields and growth are significant on leverage under both models, Profitability and size are significant on share price.
From my findings, I would recommend a firm that wants to use equity financing to make sure it has a high profitability in order to attract shareholders. This way they will be able to sell shares at higher prices and get more capital. |
| first_indexed | 2025-11-14T18:59:08Z |
| format | Dissertation (University of Nottingham only) |
| id | nottingham-27411 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T18:59:08Z |
| publishDate | 2014 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-274112017-10-19T13:58:41Z https://eprints.nottingham.ac.uk/27411/ A COMPARISON OF HOW DETERMINANTS OF CAPITAL STRUCTURE AFFECT LEVERAGE AND SHARE PRICE: EVIDENCE ON UK FIRMS. Mbatia, Joy This study seeks to determine how various capital structure determinants affect leverage and share price from 2009-2013. I will use FTSE 350 companies and will focus on sectors such as Aerospace & Defence, Beverages, Construction & Materials, Food & Drugs retailers, Household Goods, Mobile telecommunications, Support services, Technology & Hardware Equipment and Travel & Insurance. I will test various determinants such as liquidity, profitability, size, tangibility, growth, age, non-debt tax shields and business risk. Using correlation analysis and fixed effect regression estimation model, I established a relationship between determinants and leverage then a relationship between the determinants and share price. The relationships are then analysed and compared to each other. While Liquidity, non-debt tax shields and growth are significant on leverage under both models, Profitability and size are significant on share price. From my findings, I would recommend a firm that wants to use equity financing to make sure it has a high profitability in order to attract shareholders. This way they will be able to sell shares at higher prices and get more capital. 2014-09-18 Dissertation (University of Nottingham only) NonPeerReviewed application/pdf en https://eprints.nottingham.ac.uk/27411/1/Joy_Mbatia_Dissertation.pdf Mbatia, Joy (2014) A COMPARISON OF HOW DETERMINANTS OF CAPITAL STRUCTURE AFFECT LEVERAGE AND SHARE PRICE: EVIDENCE ON UK FIRMS. [Dissertation (University of Nottingham only)] (Unpublished) |
| spellingShingle | Mbatia, Joy A COMPARISON OF HOW DETERMINANTS OF CAPITAL STRUCTURE AFFECT LEVERAGE AND SHARE PRICE: EVIDENCE ON UK FIRMS. |
| title | A COMPARISON OF HOW DETERMINANTS OF CAPITAL STRUCTURE AFFECT LEVERAGE AND SHARE PRICE: EVIDENCE ON UK FIRMS. |
| title_full | A COMPARISON OF HOW DETERMINANTS OF CAPITAL STRUCTURE AFFECT LEVERAGE AND SHARE PRICE: EVIDENCE ON UK FIRMS. |
| title_fullStr | A COMPARISON OF HOW DETERMINANTS OF CAPITAL STRUCTURE AFFECT LEVERAGE AND SHARE PRICE: EVIDENCE ON UK FIRMS. |
| title_full_unstemmed | A COMPARISON OF HOW DETERMINANTS OF CAPITAL STRUCTURE AFFECT LEVERAGE AND SHARE PRICE: EVIDENCE ON UK FIRMS. |
| title_short | A COMPARISON OF HOW DETERMINANTS OF CAPITAL STRUCTURE AFFECT LEVERAGE AND SHARE PRICE: EVIDENCE ON UK FIRMS. |
| title_sort | comparison of how determinants of capital structure affect leverage and share price: evidence on uk firms. |
| url | https://eprints.nottingham.ac.uk/27411/ |