Capital structure and abnormal returns

Sivaprasad, S. and Muradoglu, Y.G. 2012. Capital structure and abnormal returns. International Business Review. 21 (3), pp. 328-341.

TitleCapital structure and abnormal returns
AuthorsSivaprasad, S. and Muradoglu, Y.G.
Abstract

This paper examines the relation between capital structure and abnormal returns for UK equities. A firm's industry matters when examining this relation. Abnormal returns decline in firm gearing, however, abnormal returns increase as the average industry gearing in a risk class increases. Separating the average level of external financing in an industry from that in a particular firm is important. This study focuses on industry characteristics. Firms in nonregulated and competitive industries with low concentration ratios exhibit this behavior. In contrast, in the utilities risk class, abnormal returns increase in firm gearing which is similar to the findings of Modigliani and Miller (1958) which was unique to the utilities sector.

JournalInternational Business Review
Journal citation21 (3), pp. 328-341
ISSN0969-5931
YearJun 2012
PublisherElsevier
Digital Object Identifier (DOI)doi:10.1016/j.ibusrev.2011.03.007
Publication dates
PublishedJun 2012

Related outputs

Enhancing Momentum Investment Strategy Using Leverage
Forner,C., Muradoglu, Y.G. and Sivaprasad, S. 2018. Enhancing Momentum Investment Strategy Using Leverage. Journal of Forecasting. 37 (5), pp. 573-588.

The Impact of Internationalization on Zero Leverage: Evidence from the UK
Chatzivgeri, E., Dontis-Charitos, P. and Sivaprasad, S. 2016. The Impact of Internationalization on Zero Leverage: Evidence from the UK. British Accounting and Finance Association Annual Conference 2016. Bath, United Kingdom 21 - 24 Mar 2016

Home bias persistence in foreign direct investments
Levis, M., Muradoglu, Y.G. and Vasileva, K. 2016. Home bias persistence in foreign direct investments. The European Journal of Finance. 22 (8-9), pp. 782-802.

The Determinants of Zero Leverage: Evidence from Multinational Firms
Chatzivgeri, E., Sivaprasad, S. and Dontis-Charitos, P. 2015. The Determinants of Zero Leverage: Evidence from Multinational Firms. International Finance and Banking Society Corporate Finance Conference. Saïd Business School, University of Oxford, United Kingdom, 12 - 14 Sep 2015

The Determinants of Zero Leverage: Evidence from Multinational Firms
Chatzivgeri, E., Sivaprasad, S. and Dontis-Charitos, P. 2015. The Determinants of Zero Leverage: Evidence from Multinational Firms. 5th International Conference of the Financial Engineering and Banking Society. Nantes, France 11 - 14 Jun 2015

The value effects of changes in leverage: Evidence from the Travel and Leisure sector
Van Dellen, S., Sivaprasad, S. and Bas, T. 2015. The value effects of changes in leverage: Evidence from the Travel and Leisure sector. 22nd Annual Conference of the Multinational Finance Society. Halkidiki, Greece 28 Jun - 02 Jul 2015

An Investment Strategy Based on Leverage: Evidence from BSE 500
Sivaprasad, S. and D’Mello, L. 2015. An Investment Strategy Based on Leverage: Evidence from BSE 500. Journal of Emerging Market Finance. 14 (3), pp. 210-238.

How does a firm's capital structure affect stock performance?
Sivaprasad, S., Adami, R., Gough, O. and Muradoglu, Y.G. 2015. How does a firm's capital structure affect stock performance? Frontiers in Finance and Economics. 12 (1), pp. 1-31.

An empirical analysis of the performance of pension funds: evidence from UK
Sivaprasad, S., Adami, R., Gough, O. and Mukherjee, S. 2014. An empirical analysis of the performance of pension funds: evidence from UK. Studies in Economics and Finance. 31 (2), pp. 141-155.

The impact of leverage on stock returns in the hospitality sector: evidence from the UK
Muradoglu, Y.G. and Sivaprasad, S. 2014. The impact of leverage on stock returns in the hospitality sector: evidence from the UK. Tourism Analysis. 19 (2), pp. 161-171.

Are there return and volatility spillovers from major bank stocks to the national stock market in the UK?
Dontis-Charitos, P., Gough, O., Nowman, K.B. and Sivaprasad, S. 2013. Are there return and volatility spillovers from major bank stocks to the national stock market in the UK? in: Jeon, B.N. and Olivero, M.P. (ed.) Global Banking, Financial Markets and Crises (International Finance Review, Vol. 14) Emerald. pp. 243 - 268

Continuous and discrete time modelling of spillovers in equity and bond markets
Dontis-Charitos, P., Gough, O., Nowman, K.B. and Sivaprasad, S. 2013. Continuous and discrete time modelling of spillovers in equity and bond markets. International Journal of Bonds and Derivatives. 1 (1), pp. 54-87.

The effect of leverage mimicking portfolios in explaining stock returns variations
Sivaprasad, S. and Muradoglu, Y.G. 2013. The effect of leverage mimicking portfolios in explaining stock returns variations. Studies in Economics and Finance. 30 (2), pp. 94-107.

Using firm level leverage as an investment strategy
Muradoglu, Y.G. and Sivaprasad, S. 2012. Using firm level leverage as an investment strategy. Journal of Forecasting. 31 (3), pp. 260-279.

Capital structure and returns
Sivaprasad, S. and Muradoglu, Y.G. 2011. Capital structure and returns. in: Kent Baker, H. and Martin, G.S. (ed.) Capital structure & corporate financing decisions: theory, evidence, and practice Wiley. pp. 75-92

Permalink - https://westminsterresearch.westminster.ac.uk/item/8z3v0/capital-structure-and-abnormal-returns


Share this
Tweet
Email