This research work aims at reviewing the literature and identifying the factors which determine the capital structure of firms, and then empirically investigating the relationship between leverage and factors influencing it in different industries in the United Kingdom, which include basic materials sector, financial services sector, customer services sector, consumer goods sector and real estate sector. In this regard, the researcher has made use of secondary sources of information to collect information required for analysis and has conducted descriptive and statistical analysis. The results obtained do not exactly match with the findings form the literatures. OLS method is used to test four hypotheses based on the factors affecting leverage ratio or debt-to-equity ratio using 40 companies from each of five sectors. Only in case of basic materials sector the model is significant and we find a significant relationship of leverage ratio with free cash flow and tax benefits. Again for financial services sector tax benefits is significantly associated with leverage but other variables are not. Amongst the control variables (tax benefits and growth rate) only tax benefits is inversely related in case of basic materials and directly related in case of financial services. ...
es Figure 1: Preliminary Understanding of Debt to Equity Ratios in the Sectors Selected 33 List of Tables Table 1: Preliminary Understanding of Debt to Equity Ratios in the Sectors Selected 32 Table 2: Descriptive Findings – Basic Materials 34 Table 3: Descriptive Findings – Financial Services 35 Table 4: Descriptive Findings – Consumer Services 35 Table 5: Descriptive Findings – Consumer Goods 36 Table 6: Descriptive Findings – Real Estate 37 Table 7: Regression Analysis – Basic Materials Sector 38 Table 8: Regression Analysis – Financial Services Sector 39 Table 9: Regression Analysis – Consumer Services Sector 41 Table 10: Regression Analysis – Consumer Goods Sector 42 Table 11: Regression Analysis – Real Estate Sector 44 Chapter 1 – Introduction 1.1. Background to the Context At present all the major business organizations are uncertain regarding the fiscal decision which has to choose between the organizational debts and its equity capital (Kuhn, 2006). The capital structure of an organization has a direct influence either positive or negative (Bierman, 2003), on the output i.e., revenue and profits and the business. The basic target of researchers while investigating capital structure, were mainly the developed countries particularly UK. Researchers have shown that firms of developing nations tend more to raise capital through equity while developed nations raise capital through leverage or external debt. The legal conditions and tax incentives play a significant role in a firm’s decision about capital structure. Hence a nation with underdeveloped capital market conditions and low protection of creditors will choose internal sources of funds (Baker and Martin, 2011). Decisions regarding capital structure are not an easy task (George,
The comparison of capital structure across industries in the United Kingdom Acknowledgements My teachers, my parents and my friends have all contributed in this research through their dedicated guidance and support. I acknowledge their efforts and pay my special regards to my course professor…
Although the business may be operationally efficient and cost-effective, the wrong capital mix could introduce unnecessary inefficiencies and costs that could undermine the firm’s profitability and success.
Working capital management and its impact on the liquidity and profitability position of the hotel industry in the UK [Name] [Course] [Professor’s name] [Date] Contents Serial No. Topic Page No. 1. Introduction 4 2. Research Questions & Objectives 8 2.1.
The research revolves around the increasing demand for health and social care among older people in the context of China and United Kingdom. Both these countries are witnessing an ageing population demanding more healthcare attention and medical interventions.
This paper represents a financial desertion on capital structure of public limited companies in United Kingdom at pre and post financial crisis. As, financial crisis in an economy or market has major impact on capital structure of each and every firms in the market which results a overall change in capital structure of that market.
workshops/Blackboard) Dr Chin Bun Tse On Blackboard Title (max. 15 words) Note on Content: A title should summarise the main idea of the proposal simply and, if possible, with style. You may want to use a title and a subtitle, separated by a colon (e.g. ‘Brown Eggs: What they are Made of and How to Eat Them’) Capital Structure in the Cement Industry: Which industry characteristics determine how the companies are financed?
The capital structure of a firm is the relative proportion of borrowed capital in comparison to equity capital. The importance of investigating the implications of the level of debt in the financing of a firm’s operation is of importance because it has direct impact on the cost of capital of the company and therefore on the company’s bottom line.
One manager each from the two organisations was interviewed and 20 employees, 10 from each of the two organisations participated in two focus group discussions. The research found that both the SMEs outsourced their payroll management and the service organisation also outsourced its training activities as well.
Theories of capital structure and also empirical studies on that have been analyzed trough out the paper to assess the reasons behind change in capital structure. This paper provides a clear understanding of the influence of financial crisis on corporate finance which leads to change in capital structure based on the financial environment of the market.
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According to the report the mechanisation of some of the process have helped to expedite the operations again at an increased cost of materials. All these aspects lead to a question of exploring suitable methods to explore sustainable construction process in the country. Various innovative approaches that make the housing construction more efficient.
30 pages (7500 words)Dissertation
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