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Financial leverage and firm value
Dissertation (MBA)--University of Pretoria, 2008.
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| Format: | Thesis |
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University of Pretoria
2013
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| _version_ | 1867613585981571072 |
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| access_status_str | Open Access |
| author2 | MacKenzie, Max |
| author_browse | MacKenzie, Max |
| author_facet | MacKenzie, Max |
| collection | Thesis |
| dc_rights_str_mv | © 2008, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria |
| description | Dissertation (MBA)--University of Pretoria, 2008. |
| format | Thesis |
| id | oai:repository.up.ac.za:2263/23237 |
| institution | University of Pretoria (South Africa) |
| last_indexed | 2026-06-10T12:38:29.922Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UPSpace — University of Pretoria Institutional Repository |
| publishDate | 2013 |
| publishDateRange | 2013 |
| publishDateSort | 2013 |
| publisher | University of Pretoria |
| publisherStr | University of Pretoria |
| record_format | dspace |
| source_str | UPSpace — University of Pretoria Institutional Repository |
| spelling | oai:repository.up.ac.za:2263/23237 Financial leverage and firm value MacKenzie, Max upetd@up.ac.za Rayan, Kuben UCTD Financial Business enterprises Dissertation (MBA)--University of Pretoria, 2008. The capital structure debate has been live for decades, with the key point of contention for many researchers being whether capital structure positively or negatively impacts firm value. Much of the literature on this question takes its departure from the seminal writings of Modigliani and Miller (1958) and their Theorem of Irrelevance. Many researchers have subsequently argued their case for and against the optimal value capital structure. The purpose of this research is to evaluate whether in a South African context an increase in financial leverage positively or negatively impacts firm value. Furthermore, given the high level and volatility of the current local interest rate market, this report also considers how the volatility of the local interest rate impacts on capital structure. This research was conducted using secondary data sourced from the McGregor BFA database for the period 1998-2007. The sample included 113 Johannesburg Stock Exchange (JSE) listed firms, which were stratified by industry in order to distinguish between different industries dynamics in this regard. Regression analysis was carried out for both tests It was found that an increase in financial leverage is negatively correlated with firm value. The study on the impact of interest rates on capital structure proved to be inconclusive. Gordon Institute of Business Science (GIBS) unrestricted 2013-09-06T14:48:55Z 2010-06-02 2013-09-06T14:48:55Z 2009-04-01 2008 2010-03-16 Dissertation Rayan, K 2008, Financial leverage and firm value, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://hdl.handle.net/2263/23237 > G10/78/ag http://hdl.handle.net/2263/23237 http://upetd.up.ac.za/thesis/available/etd-03162010-143159/ © 2008, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria application/pdf University of Pretoria |
| spellingShingle | UCTD Financial Business enterprises Financial leverage and firm value |
| title | Financial leverage and firm value |
| title_full | Financial leverage and firm value |
| title_fullStr | Financial leverage and firm value |
| title_full_unstemmed | Financial leverage and firm value |
| title_short | Financial leverage and firm value |
| title_sort | financial leverage and firm value |
| topic | UCTD Financial Business enterprises |
| url | http://hdl.handle.net/2263/23237 http://upetd.up.ac.za/thesis/available/etd-03162010-143159/ |