Capital Structure And Shareholder Return Of Listed Indian Companies At Vegesna Securities Private Limited

Abstract

The study extends empirical work on capital structure theory in three ways. First, it examines a much broader set of capital structure theories, many of which have not previously been analysed empirically. Second, since the theories have different empirical implications in regard to different types of debt instruments, the authors analyse measures of short-term, long-term, and convertible debt rather than an aggregate measure of total debt. Third, the study uses a factor analytic technique that mitigates the measurement problems encountered when working with proxy variables. In recent years, A number of theories have been proposed to explain the variation in debt ratios across firms. The theories suggest that firms select capital structures depending on attributes that determine the various costs and benefits associated with debt and equity financing. Empirical work in this area has lagged behind the theoretical research, perhaps because the relevant firm attributes are expressed in terms of fairly abstract concepts that are not directly observable