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 - 01 Jul 2015

TitleThe value effects of changes in leverage: Evidence from the Travel and Leisure sector
AuthorsVan Dellen, S., Sivaprasad, S. and Bas, T.
TypeConference paper
Abstract

It is well documented that the Travel and Leisure sector is capital intensive when compared to other sectors due to the high level of capital required for fixed assets. Given this, this paper examines the relation between changes in leverage and stock returns of firms in this sector, in addition to examining whether changes in leverage have any significant effect on a sector basis. Using a final sample of 173 firms over the period between 1993 and 2012, we find that leverage only acts as a significant determinant of returns in the case of highly levered firms, as would be the case in the Travel and Leisure sector.

KeywordsTravel and Leisure sector
Changes in leverage
Capital structure
Year2015
Conference22nd Annual Conference of the Multinational Finance Society
Accepted author manuscript02. The Value Effects of Changes in Leverage (Paper).pdf

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