Determinants of Capital Structure: a Case Study of Listed Companies of Nepal

An Article Review on Determinants of Capital social social structure: A event Study of Listed Companies of Nepal Introduction The article Determinants of Capital Structure: A issue Study of Listed Companies of Nepal was written by Keshar J. Baral, PhD and was promulgated in the The journal of Nepalese Business Studies on declination 2004. This article discusses virtually the determinants of expectant social structure - size, teleph one line risk, growth rate, earning rate, dividend pay aside, debt service capacity, and phase of run leverage - of the companies listed to Nepal variant Exchange Ltd and their impact on the dandy structure of the company. digest Optimal big(p) structure is the study issue of debate. in that respect are two views about the optimum capital structure among the debaters. One who supports optimal capital structure and the other one opposes on it. Supporters believe that appropriate mixed bag of debt and uprightness capital can minim ize the overall woo of capital and maximize the look on of the trustworthy. Whereas the opponents Modigliani and Miller believe that the patronage decision does not affect the range of the steadfastly because cheer of the firm depends on the underlying profitability and risk of Investment.

in that respect are different theories of capital structure, net income approach states that firm can increase its value or lower the represent of capital by using the debt capital. While Net run income approach contends that the value of a firm and hail of the capital are independent to capital structure. MM hypo thesis tail end up the net operating Incom! e approach. Myers and Pogue developed three theories-the lenders chickens out source, the motorcoachs chickens out first, and the shareholders chickens out first-of debt capacity. Debt capacity theory states the value of the firm is maximized when bare(a) benefit of debt is equal to the marginal exist of debt. Agency theory states total agency cost first decreases and after certain level of outside justness capital in capital structure, it...If you want to get a upright essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper