Authors : Sayanth Sudheer; Vishnu N S
Volume/Issue : Volume 7 - 2022, Issue 3 - March
Google Scholar : https://bit.ly/3IIfn9N
DOI : https://doi.org/10.5281/zenodo.6516317
This research analyses how the capital structure
affects the value of the firm of IT companies listed in the
Bombay Stock Exchanges. The data was collected from
financial statements of 20 IT companies listed in Bombay
Stock Exchange from 2012 to 2021. Quantitative research
method with panel regression was used in this study. This
study has used Tobin’s Q ratio as the dependent variable.
This study has also used Short term debt, Long term debt,
Equity, Size, Liquidity and profitability as the independent
variable. The results of the analysis show that long term
debt is not affecting the firm value and the short term debt
has a negative relationship with the firm value. Equity is
positively affecting the firm value and is significant. Size
and profitability has positive and significant relationship.
Liquidity has a negative relationship with the firm value.
Indian IT companies should try to decrease the debt in
their capital structure and increase the equity to maximize
the firm value.
Keywords : Capital Structure, Firm Value, Cost of Capital, Corporate Finance, IT Firms.