Testing the Leverage Effect for the Companies Listed on the Capital Market
Andrei Stanculescu () and
Petre Brezeanu ()
Annals of the University of Petrosani, Economics, 2009, vol. 9, issue 4, 249-256
The financial theory admits that levered firms record a value surplus compared to unlevered firms, at least because of the tax savings, related to interest. A series of fundamental studies indicate this phenomenon. However, incurred debt, especially the long term debt, has a more consistent influence on performance, as stated by the Modigliani-Miller model. To this respect, the paper proposes the empirical testing of this model, using financial-accounting data of firms listed on the Romanian capital market. In particular, the statistical significance of the leverage effect will be analyzed, on a sample of companies listed on the Bucharest Stock Exchange.
Keywords: leverage effect; financial lever; financial return; regression; capital market (search for similar items in EconPapers)
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pet:annals:v:9:i:4:y:2009:p:249-256
Access Statistics for this article
More articles in Annals of the University of Petrosani, Economics from University of Petrosani, Romania
Bibliographic data for series maintained by Imola Driga ().