Dynamics Of Financial Structure And Value Of Firm: Evidence From Nifty

Abstract:

This study examines the effect of capital structure on value of firm listed in NIFTY during 2009 to 2018. Variables including size. Profitability, Tangibility. Growth and age taken for examining as determinants of capital structure. In addition, we include the investigation of capital structure and performance of firm and ultimately result on firm’s value. Moreover, macroeconomic indicators are also used to see the impact on firm performance and value of firm. Using panel data regression, the result shows that profitability, liquidity , size growth opportunity and age has strong relation with financial decision in Indian  companies and also seen that  capital structure decision has strong impact on firms performance similarly firm performance is related with firm value.

The study also reveals that macroeconomic variable among GDP, inflation and CPI, CPI has no relation with performance as well as value of firm. GDP has relation with firms’ value and inflation has strong relation with the firm performance.

Keywords: Indian companies, capital structure decision, determinants value of firm, macro economic variables.

Mrs. Rajshree Sharma, Dr. Navita Nathani

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