The capital structure and its impact on firm value of JSE securities exchange listed companies

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dc.contributor.author Mohohlo, Neo Rose
dc.date.accessioned 2013-08-27T08:53:18Z
dc.date.available 2013-08-27T08:53:18Z
dc.date.issued 2013-08-27
dc.identifier.uri http://hdl.handle.net/10539/13075
dc.description Thesis (M.M. (Finance & Investment))--University of the Witwatersrand, Faculty of Commerce, Law and Management, Graduate School of Business Administration, 2013. en_ZA
dc.description.abstract The capital structure theory was pioneered by Modigliani and Miller (1958). In their study, Modigliani and Miller (1958) argued that capital structure was irrelevant to firm value. There is also significant theory on the capital structure of firms and its determinants. Using a panel of non-financial firms listed on the JSE Securities Exchange, we investigate the relevance of capital structure on firm value and investigate the capital structure of firms in South Africa. The results of the analysis on the relevance of capital structure on firm value indicated that there is no statistically significant relationship between firm value and the capital structure of firms. This analysis was conducted for the general sample of firms in the study, within industries and by firm size, however, the results were consistent throughout all the analysis. The results of the capital structure and its determinants analysis indicated that South African firms followed a pecking order theory. The results also indicated that profitability, size, asset tangibility and tax shield has a statistically significant relationship to gearing or the firm’s capital structure. The analysis of the South African firms’ capital structure indicated that firms in South Africa tend to use more long-term debt than short-term debt. The leverage ratios also differed among industries with the Health care industry having the highest levels of leverage and the Technology industry having the lowest levels of leverage. en_ZA
dc.language.iso en en_ZA
dc.subject Capital structure en_ZA
dc.subject Johannesburg Stock Exchange en_ZA
dc.subject Firms en_ZA
dc.subject South Africa en_ZA
dc.title The capital structure and its impact on firm value of JSE securities exchange listed companies en_ZA
dc.type Thesis en_ZA


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