The Miller-Modigliani Theory 15 2.4.3. Pecking Order Theory 16 2.4.4. The Agency Cost Theory 18 2.5. Potential Determinants of Capital Structure 19 2.6. Statement of the Problem 26 Chapter 3: Data and Methods 28 3.1. Research Methodology 28 3.2. Research Purpose and Research Approach 29 3.3. Qualitative Research 29 3.4. Quantitative Research 30 3.5. Primary Research 30 3.6. Secondary Research 31 Chapter 4: Analysis and Results 34 4.1. Overview 34 4.2. Selection of Dependent Variables and Independent Variables 35 4.3. Data Analysis Techniques 36 4.4. Fieldwork and Data Collection 37 4.5. Hypotheses Formulation and Variable Selection 38 4.6. Data Sources and Data Presentation 44 Chapter 5: Discussion and Interpretation of Findings 50 5.1. Data Analysis and Discussion 50 5.2. Regression Results 51 Table 5.2.1 - The Regression Analysis of RBS 53 Table 5.2.2 - The Regression Analysis of Standard Chartered Plc 54 Table 5.2.3 - The Regression Analysis of Lloyds Group Plc 55 Table 5.2.4 - The Regression Analysis of Barclays Plc 56 5.3. Robustness of Statistical Data 58 5.4. Interpretation of Findings 60 Chapter 6: Discussion and Conclusion 63 6.1. Summary 63 6.2. Theoretical Implications 65 6.3. Practical Implications 65 6.4. Limitations 67 6.5. Directions for Future Research 67 6.6. Reflections 68 References 71 Bibliography 77 Appendices 80 Table 1 – Regression Model of Royal Bank of Scotland 80 Table 2 – Regression Model of Standard Chartered Plc 84 Table 3 – Regression Model of Barclays Plc 89 Table 4 – Regression Model of HSBC 93 Table 5 – Regression Model of Lloyds 97 Chapter 1: Introduction The functions of financial management of a firm deal with the management of the sources from which funds are received and the effective utilization of such funds. Debt holders and equity holders are the suppliers of finance, and they supply finance for raising capital for assets of the company. So they have the right to participate in cash flows generated from the investment of the raised capital. The ratio of share of profits generated is determined by the debt equity ratio. As debt holders are the first to be paid, they become important to the firm if the firm wants to maximize the returns of the equity holders. As cost is also an important component of financing, so on a way to examine the net benefit from an investment, the cost incurred on such investment is also to be accounted. The objective of the study is to analyse the impact of capital structure on the performance of financial institution of United Kingdom. In order to achieve the objective, the study covers literature review and theoretical framework of the topic. Research design has been done with the intention of selecting appropriate methodology and data collection analysis. Moreover, the data will also help to get the findings of the research. After interpreting the research findings, the study finally ends with conclusion, practical implication of the research and directions for future research. 1.1. Background of the Study The mix of financial liabilities of a firm is referred to as its leverage (i.e. a mix of financial instruments that tends to increase the potential of return of investment undertaking the risk associated with it). Although financial capital is uncertain, it is still considered to be the critical resource by all firms, and suppliers of finance make this investment so as to have control over the firm. In a firm debt holders and equity holders are the two types of investors who invest in equity and debt
ANALYSING THE IMPACT OF CAPITAL STRUCTURE ON THE PERFORMANCE OF UK FINANCIAL INSTITUTIONS Table of Contents Chapter 1: Introduction 5 1.1. Background of the Study 5 1.2. Problem Formulation 9 1.3. Research Objectives 9 1.4. Significance of the Study 9 1.5…
In 2008 the world faced a financial meltdown. Globally the world faced major financial crisis and recession. The economic recession was a result of the US mortgage crisis. The subprime crisis of US caused ripple effect across the globe as a result most of the countries felt a financial crunch.
The aim of this study is to investigate the impact of the global financial crisis on the UK property market. This will involve seeking data that will reveal the direct financial impacts of the crisis on the property companies, the impact on property consumers in terms of confidence and patterns, the strategic management adaptations to the crisis and the impacts of such responses.
Accounting Restatements and Institutional Ownership: The Case of the UK Table of Contents Chapter 1: Accounting Restatements 4 1.1Introduction 4 1.2Motivations for Studying the Issue 5 1.3Research Problem 6 1.4Research Methodology 6 1.5Organisation of the Dissertation 7 Chapter 2: Literature Review 8 2.1 UK Stock Exchange (LSE) Market 8 2.2 Corporate Disclosure practices and Institutional Investors 9 2.3 The Governance Role of Institutional Investors 12 Chapter 3: Hypothesis Development 16 Chapter 4: Research Methodology 19 4.1 Sample Selection and Data Sources 19 20 4.2 Descriptive Analysis 20 4.3 Research Methodology 22 Chapter 5: Results 26 5.1 Empirical Results 26 5.2 Conclusion of Empiri
The capital structure of a company represents the mix of the different sources of capital that the company makes use of for financing the activities of the company targeted towards achievement of its goals and objectives. It is concerned about the relative proportions of debt and equity in the financing of the activities.
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.
This is pursuant to the Modigliani-Miller theory that a firm may seek to maximize profitability by resorting to a higher level of debt financing in order to take advantage of the tax deductibility of interest expenses in relation to this debt. The study gathered data from audited financial statements of ten manufacturing companies operating in Saudi Arabia and publicly listed in the exchange.
Literature Review 10 2.1 Introduction 10 2.2.Theoretical Background 11 2.2 Some previous tests conducted on the Exchange Markets 12 Reference 15 1. Proposal 1.1 Title of the project Impact of Announcing Dividends on Shares Prices of Corporations Listed in the Dubai Financial Market.
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.
Abstract The capital structure of an organization has a direct influence either positive or negative on the output i.e., revenues and profits and the business. As there are numerous factors which influence the optimum choice of capital structure for a firm, therefore there cannot be a universal benchmarking of factors which can be considered as determining the capital structure choices of firms.
This study takes a similar shape with the objective of using case study research design to critically study how the practice of corporate governance in five major UK banks have transformed the banks in terms of profitability and growth. As part of the case study, the annual reports of the banks were critically studied, as well as other related literature.
60 pages (15000 words)Dissertation
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