Open AccessRole of Capital Structure in Firm’s Value: A Case of Pakistani Firms
Author(s) -
Muhammad Asif,
MUHAMMAD USMAN HAMEED,
ZAINULLAH KHALIL
Publication year - 2021
Publication title -
journal of business and tourism
Language(s) - English
Resource type - Journals
eISSN - 2521-0548
pISSN - 2520-0739
DOI - 10.34260/jbt.v1i2.16
Subject(s) - capital structure , enterprise value , market value added , value (mathematics) , capital call , cost of capital , miller , capital (architecture) , business , debt , debt financing , economics , finance , corporate finance , financial capital , microeconomics , individual capital , profit (economics) , mathematics , ecology , history , statistics , archaeology , biology
The Most important and critical decision for a finance manager is adequate Capital structure. Modigliani and Miller had started the debate of capital structure in creating firm’s value. The research was conducted to find out the impact of capital structure and the value of the firm in Pakistan. The research was conducted on 71 non-financial firms of KSE 100 index. Using fix effect regression in the study it was found that there is significant effect of Capital structure on firm’s value but the use of debt financing had negative relationship with the firm’s value.