different determinants of capital structure which influence the leverage ratio and the study is also proposed to find out relationship of different explanatory variables with each other whether positive or negative influence exists. The variables taken in this study are Leverage, earnings before interest and tax, business size, fixed asset, depreciation and market to book value. This study also includes expression of different economic and financial analyst about the determinants of capital structure
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company for their strategy to make profit to their firms. Financial strategy also will influence the capital structure. The theory of Capital structure is closely related to the firm’s cost of capital. It is one of the effective tools of management to manage the cost of capital. Capital structure is the mix of the long-term sources of funds used by the firm. The primary objective of capital structure decisions is to maximize the market value of the firm or achieving the maximization of shareholders
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Relevant dividend view: Farrar, Salwyn and Gordon are representatives of this theory. Their theory is that company's dividend distribution has an impact on the value of the company. Dividend payment is not dispensable, but very necessary. It is an important strategy of a company. If the company’s choice of the dividend payment policy on the stock market changes , the company's capital structure and corporate value will be affected, as well as the realization of shareholders' wealth. Dividend policy
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in determining the price and terms of a transaction the acquirer is prepared to offer and accept. The principal determinants of the value of the shares are: 1) after-tax cash flows that will be generated 2) the acquirer’s required rate of return 3) non-operating assets 4) amount of interest-bearing debt Forecast financial statements are used for assessing each of the determinants of its equity value. In the terms of an open market transaction normally stipulate that adjustments to the agreed
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| | | | | This course provides a survey of the financial problems associated with the life cycle of a business firm. Topics include: financial analysis and planning, capital budgeting, cost of capital, and the sources and uses of business funds. While the emphasis is on decision making within a corporate environment, the tools taught in this course are just as relevant to other forms of business organization and to personal financial
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------------------------------------------------- An analysis of capital structure of NEXT Programme of Study: MSC INVESTMENT Module: International Treasury Management Tutor: Students ID Number: Date: 23/3/2016 Programme of Study: MSC INVESTMENT Module: International Treasury Management Tutor: Students ID Number: Date: 23/3/2016 Contents 1. Introduction 3 2. Capital structure 4 2.1. Theories 4 2.2. Types of capital 6 2.3. Sources of capital 7 2.4. Reasons of conducting
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[pic] 25765 | Corporate Finance AUT | 2014 UTS: FINANCE Discipline group CASE STUDY COVER SHEET |Surname |Initials |Student number |Signature * | |Ng |J.W.C |88340722 | | |Yeung |L |00049344
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1.Capital structure A capital structure refers to the way a corporation finances its assets through the mix of equity, debt or hybrid securities. The optimal capital structure is the one in which, the market value of the firm is maximized when its cost of capital is minimized. The firm should adopt the EPS- EBIT approach to the capital structure. This approach involves selecting the capital structure that maximizes EPS (Earnings per share) over the expected range of EBIT (Earnings before interest
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relies on a number of assumptions. For instance, investors do not care whether the kind of dividends they receive is from capital gains income or dividend income. There is also the assumption of no issuance costs. In respect to these, if organizations do not have to pay the cost of issuance when they are issued with new securities, they may be able to obtain the required equity capital on the similar cost. This is irrespective of whether they paid their past earnings as dividends or retained them. In
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organization in terms of formation and record-keeping is sole proprietorship. The life cycle of business is for as long as the owner is alive, kicking and well. This business form would be used by the manager/owner impact the firm's ability to raise capital in such a way that in the first 5 years of growing the business, he can get support from family and friends. Financial Institutions can loan him based on his personal credit. Banks will require previous years tax returns. As a sole proprietor in
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