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Journal articles on the topic 'Modigliani-Miller theory'

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Published: 28 May 2022

Last updated: 31 July 2025

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1

Brusov, Peter, and Tatiana Filatova. "Capital Structure Theory: Past, Present, Future." Mathematics 11, no. 3 (2023): 616. http://dx.doi.org/10.3390/math11030616.

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The purpose of this review is to analyze all existing theories of the capital structure (with their advantages and disadvantages) in order to understand all aspects of the problem and make correct management decisions in practice. The role of the capital structure is that the correct determination of the optimal capital structure allows the company’s management to maximize the capitalization of the company and the long-term goal of the function of any company. The review examines the state of the capital structure and capital cost theory from the middle of the last century, when the first quan

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2

Sultan Obeidat, Mohammed Ibrahim. "The Validity of Modigliani-Miller Theorem at the Commercial Banking Industry of Jordan." WSEAS TRANSACTIONS ON BUSINESS AND ECONOMICS 18 (June 1, 2021): 929–40. http://dx.doi.org/10.37394/23207.2021.18.88.

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The study objects for investigating whether the findings of Modigliani-Miller Theorem (1958-1963), are valid in the environment of listed commercial banks at Amman Stock Exchange. To achieve the objective of the study, data of 13 out of a total of 15 listed commercial banks, covering the period (2010-019), had been collected and tested, using descriptive statistics and the ordinary least square method. The analysis of the data and hypothesis testing leads to an existence of a significant positive impact of debt on the firm market value. Opposite to Modigliani-Miller theorem, the study finds th

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Brusov, Peter, Tatiana Filatova, and Veniamin Kulik. "Benefits of Advance Payments of Tax on Profit: Consideration within the Brusov–Filatova–Orekhova (BFO) Theory." Mathematics 10, no. 12 (2022): 2013. http://dx.doi.org/10.3390/math10122013.

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The modern capital cost and capital structure theory—the Brusov–Filatova–Orekhova (BFO) theory and its perpetuity limit, the Modigliani–Miller theory—describe the case of the payments of income tax at the end of the year. However, in practice, companies could make these payments in advance. Recently, the Modigliani–Miller theory has been modified for the case of advanced payments of income tax and has shown that the obtained results are quite different from ones in the “classical” Modigliani–Miller theory. In the current paper, for the first time, we modify the Brusov–Filatova–Orekhova (BFO) t

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4

Biger, N. "Modigliani and Miller Capital Structure Theory - A Correction." Studies in Economics and Econometrics 16, no. 3 (1992): 85–87. http://dx.doi.org/10.1080/03796205.1992.12129031.

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5

Ross, Stephen A. "Comment on the Modigliani-Miller Propositions." Journal of Economic Perspectives 2, no. 4 (1988): 127–33. http://dx.doi.org/10.1257/jep.2.4.127.

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[This is a comment on “The Modigliani-Miller Propositions after Thirty Years” by Merton H. Miller in this same issue.] What a treat it is to have the opportunity to read Merton Miller's ruminations on the MM Propositions. A comment on Miller and Modigliani's work can easily become a discussion of any facet of modern finance. I will focus on the two areas of arbitrage and taxation. Since the original MM analysis, economists have learned an enormous amount about the role played by no arbitrage conditions in financial markets. Taxation is where the real world meets the theory. At first blush, the

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Brusov, Peter, Tatiana Filatova, Natali Orekhova, Veniamin Kulik, She-I. Chang, and George Lin. "Generalization of the Modigliani–Miller Theory for the Case of Variable Profit." Mathematics 9, no. 11 (2021): 1286. http://dx.doi.org/10.3390/math9111286.

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For the first time we have generalized the world-famous theory by Nobel Prize winners Modigliani and Miller for the case of variable profit, which significantly extends the application of the theory in practice, specifically in business valuation, ratings, corporate finance, etc. We demonstrate that all the theorems, statements and formulae of Modigliani and Miller are changed significantly. We combine theoretical and numerical (by MS Excel) considerations. The following results are obtained: (1) Discount rate for leverage company changes from the weighted average cost of capital, WACC, to WAC

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Brusov, Peter, and Tatiana Filatova. "The Modigliani–Miller Theory with Arbitrary Frequency of Payment of Tax on Profit." Mathematics 9, no. 11 (2021): 1198. http://dx.doi.org/10.3390/math9111198.

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The main purpose of the current study is the generalization and further development of the Modigliani–Miller theory taking into account one of the conditions of the real functioning of companies for the case of paying income tax with an arbitrary frequency (monthly, quarterly, semi-annual or annual payments). While a return is not required more than once a year, businesses may be responsible for filing estimated taxes based on profits earned. This requirement is dependent on showing a profit. For example, sole proprietors must file estimated taxes on profits quarterly, on the 15th day of April

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8

Miller, Merton H. "The Modigliani-Miller Propositions After Thirty Years." Journal of Economic Perspectives 2, no. 4 (1988): 99–120. http://dx.doi.org/10.1257/jep.2.4.99.

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This issue of the Journal of Economic Perspectives appears on the 30th anniversary of the Modigliani-Miller propositions in “The Cost of Capital, Corporation Finance and the Theory of Investment,” published in the American Economic Review, June 1958. The editors have invited me, if not to celebrate, at least to mark the event with a retrospective look at what we set out to do on that occasion and an appraisal of where the propositions stand today after three decades of intense scrutiny and often bitter controversy.

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Manrique Joya, Gloria Mercedes, and Gustavo Enrique Salazar Otálora. "Reflexiones teóricas sobre la estructura de capital de las pymes." Visión Empresarial 1, no. 1 (2015): 12. http://dx.doi.org/10.24267/24629898.90.

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En el presente artículo se abordan referentes teóricos sobre la estructura del costo de capital de las pymes, con énfasis en una reflexión sobre las teorías desarrolladas por Modigliani y Miller (1958; citados por Miller & Modigliani, 1963): la teoría MM (la teoría trade-off) y la teoría de la jerarquía financiera (pecking order theory) de Myers y Majluf (1984). También se presentan referentes empíricos para explicar la estructura financiera y su consecuente costo de capital, y finalmente se realiza un acercamiento a la estructura de capital de las pymes en Colombia y la región, bajo el mo

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10

Biger, N. "Modigliani and Miller Capital Structure Theory: Some Clarifying Comments." Studies in Economics and Econometrics 15, no. 3 (1991): 81–91. http://dx.doi.org/10.1080/03796205.1991.12129012.

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11

Silva, Amandio F. C. da. "Does the Miller-Modigliani Dividend Irrelevance Theory Apply to Portuguese Companies?" Journal of Ecohumanism 3, no. 5 (2024): 1153–59. http://dx.doi.org/10.62754/joe.v3i5.3964.

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Miller and Modigliani´s theories have been studied and discussed by many researchers, but are based on optimal market conditions, where there are no transaction costs or taxes involved. These assumptions are not true to any modern market. One of the most famous theories of M-M is the dividend irrelevance theory, where the authors argued that dividends do not make any difference to the share prices, whether paid or not. This theory too was the target of several researchers, some of them defending it, others criticizing it. This article analyzes their theory based on optimal market conditions an

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Javed, Syed Muhammad, Agha Jahanzeb ., and Saif-ur-Rehman . "A Critical Review of Capital Structure Theories." Information Management and Business Review 4, no. 11 (2012): 553–57. http://dx.doi.org/10.22610/imbr.v4i11.1012.

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The purpose of this paper is to scrutinize and appreciate the theories of capital structure starting from theory of Miller and Modigliani (1958) of capital structure, which is also known as irrelevance theory of capital structure and also including theory like pecking order theory, trade off theory, market timing theory and agency cost theory. In addition, authors have tried to explain the theories and their contradiction with each other in detail. This paper will be an addition to understand the theories of capital structure.

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13

Giglio, Ferdinando. "The Capital Structure through the Modigliani and Miller Model." International Business Research 15, no. 11 (2022): 11. http://dx.doi.org/10.5539/ibr.v15n11p11.

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The Modigliani-Miller theorem is not only his most important contribution to the theory of finance, but it is one of the most important results in the last half century of evolution of the financial economy, which among other things has certainly not been poor in contributions. important.  The Modigliani-Miller theorem concerns the financing choices of firms, and in particular the choice between debt and shares. It identifies the conditions under which the choice of issuing debt or shares to finance a given level of investments does not affect the value of companies, and therefore

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Brusov, P. N., T. V. Filatova, N. P. Orekhova, and V. L. Kulik. "Application of Brusov-Filatova-Orekhova Theory (BFO Theory) and Modigliani-Miller Theory (MM Theory) in Rating." Theoretical Economics Letters 08, no. 05 (2018): 866–87. http://dx.doi.org/10.4236/tel.2018.85062.

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Brusov, Peter, Tatiana Filatova, and Natali Orehova. "Inflation in Brusov–Filatova–Orekhova Theory and in its Perpetuity Limit – Modigliani – Miller Theory." Journal of Reviews on Global Economics 3 (June 18, 2014): 175–85. http://dx.doi.org/10.6000/1929-7092.2014.03.13.

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16

Stiglitz, Joseph E. "Why Financial Structure Matters." Journal of Economic Perspectives 2, no. 4 (1988): 121–26. http://dx.doi.org/10.1257/jep.2.4.121.

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[This is a comment on “The Modigliani-Miller Propositions after Thirty Years” by Merton H. Miller in this same issue.] The 1958 paper by Franco Modigliani and Merton Miller has been justly hailed as a landmark in the modern theory of finance. What has not been sufficiently emphasized is the importance of the paper to the development of economic theory and practice. Indeed, it is ironic that a paper which purportedly established that one need not pay any attention to financial structure -- that financial structure was irrelevant -- should have focused economists' attention on finance. Again iro

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Attahiri, Abir, Maroua Zineelabidine, and Mohamed Makhroute. "Managerial Shareholding and Performance in LBOs: Evidence from the MENA Region." Economies 13, no. 7 (2025): 193. https://doi.org/10.3390/economies13070193.

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This research explores the impact of ownership structure on the financial performance of Leveraged Buyout (LBO) transactions in the MENA region, a key emerging market region. Drawing on agency theory by Jensen & Meckling and the capital structure theory of Modigliani and Miller, the study investigates how different shareholder configurations, particularly managerial equity participation, influence LBO outcomes. Based on a sample of 233 transactions conducted between 2000 and 2023, the research adopts a quantitative methodology grounded in a hypothetico-deductive approach. The analysis focu

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18

Elentably, Felix. "A Preliminary Research on Financing in Enterprises." International Journal of Accounting and Financial Reporting 12, no. 4 (2022): 29. http://dx.doi.org/10.5296/ijafr.v12i4.20598.

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The capital structure theory is a very important question in economy, the modern capital structure theory by Modigliani and Miller is proposed based on the assumption of perfect capital market. The core problem of capital structure is the company financing options, with the vigorous development of the world capital markets, enterprise's financing way has become increasingly flexible and diversified, the enterprise should choose different financing ways according to their own situation, give full consideration to the development, production scale, repayment ability and financing risks. This pap

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Brusov, Peter, Tatiana Filatova, Natali Orekhova, Veniamin Kulik, She-I. Chang, and George Lin. "The Generalization of the Brusov–Filatova–Orekhova Theory for the Case of Payments of Tax on Profit with Arbitrary Frequency." Mathematics 10, no. 8 (2022): 1343. http://dx.doi.org/10.3390/math10081343.

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Both main theories of capital cost and capital structure—the Brusov–Filatova–Orekhova (BFO) theory and its perpetuity limit, the Modigliani–Miller theory—consider the payments of tax on profit once per year, while in real economy these payments are made more frequently (semi-annual, quarterly, monthly etc.). Recently the Modigliani–Miller theory has been generalized by us for the case of tax on profit payments with an arbitrary frequency. Here for the first time, we generalized the Brusov–Filatova–Orekhova (BFO) theory for this case. The main purpose of the paper is bringing the BFO theory clo

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20

Philomina I, Udobi,, and Iyiegbuniwe, Wilfred I. "A Test of Miller and Modigliani Dividend Policy Irrelevance Theory in Nigerian Stock Market." American Finance & Banking Review 2, no. 2 (2018): 1–13. http://dx.doi.org/10.46281/amfbr.v2i2.132.

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This study empirically tests for the validity of Miller and Modigliani’s dividend irrelevance proposition in the Nigerian Stock Exchange (NSE). Secondary data were obtained from the Nigerian Stock Exchange fact book and firms’ annual audited financial statements for fifteen years (2001-2015). Mediation Analyses, was used to measure the direct and indirect effects of dividend on stock price. Correction of the anomalous use of current dividend and current earnings by the use of naive expectation of dividend and earnings revealed that the direct effect of expected dividend on share price is signi

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21

Krstevska, Aneta, Tome Nenovski, and Kristina Pogacnik Kostovska. "Testing the Modigliani and Miller Theory in Practice: Evidence from the Macedonian Banking System." Eastern European Economics 55, no. 3 (2017): 277–89. http://dx.doi.org/10.1080/00128775.2017.1294021.

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22

Bellandi, Francesco. "Own Credit Risk Accounting, Modigliani-Miller Theorem, and the Fallacy of Counter-Intuitive Results." International Journal of Business and Management 16, no. 9 (2021): 129. http://dx.doi.org/10.5539/ijbm.v16n9p129.

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Purpose: This article tests own credit risk accounting under Modigliani-Miller theory to determine whether there is a fundamental fallacy in the unsolved issue of counter-intuitive results.  Design/methodology/approach: A system of equations derived from the MM theorem to own risk.  Findings: Solutions to the wealth transfer hypothesis. Parameters of issuer and holder that nullify own credit risk gain/loss and impairment loss/gain. A theoretical framework is developed to reconcile accounting to Modigliani-Miller theory. If the MM theory is true, as generally it is held

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Nababan, Boy Chandra, Isfenti Sadalia, Muhammad Dimas Prasetya, and Nurul Adelia. "Dividend Policy And Stock Price: Testing The Miller-Modigliani Dividen Irrelevant Theory LQ45 In Indonesia." SOUTHEAST ASIA JOURNAL oF GRADUATE OF ISLAMIC BUSINESS AND ECONOMICS 3, no. 3 (2024): 150–56. https://doi.org/10.37567/sajgibe.v3i3.3399.

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The dividend irrelevance theory proposed by Miller and Modigliani suggests that dividend policy does not affect firm value in a perfect market with no transaction costs and taxes. However, this theory has been widely debated in empirical research, with mixed results across different stock markets. This article aims to test the validity of the dividend irrelevance theory in Indonesia by examining companies listed on the LQ45 index of the Indonesia Stock Exchange (IDX) for the period 2019-2023. The methodology includes analyzing stock prices before and after dividend announcements, considering t

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Hamad, Salah Ben. "Financial manager decisions in small and medium Tunisian firms." Corporate Ownership and Control 6, no. 3 (2009): 450–64. http://dx.doi.org/10.22495/cocv6i3c4p4.

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The agency framework has shifted research in the theory of finance from the traditional quantitative analysis towards a richer analysis that incorporates the behavioural aspects. In this paper we implement an exploratory analysis in order to pick up the behaviour of the managers of small and medium firms (SMF) in financial decisions making. An Important finding in our research is that the traditional Modigliani and Miller framework cannot be merely translated to analyse the financing decision in a context of asymmetric information and agency conflicts among the different corporate actors. Empi

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Kahtani, Noura Al, and Mohamed Al Eraij. "Does capital structure matter? Reflection on capital structure irrelevance theory: Modigliani-Miller theorem (MM 1958)." International Journal of Financial Services Management 9, no. 1 (2018): 39. http://dx.doi.org/10.1504/ijfsm.2018.089918.

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Al Kahtani, Noura, and Mohamed Al Eraij. "Does capital structure matter? Reflection on capital structure irrelevance theory: Modigliani-Miller theorem (MM 1958)." International Journal of Financial Services Management 9, no. 1 (2018): 39. http://dx.doi.org/10.1504/ijfsm.2018.10011008.

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Mr., Douglas Simiyu Wafula, and Willis Otuya Dr. "A Critical Literature Review of Capital Structure Theories." American Based Research Journal 8, no. 11 (2019): 53–57. https://doi.org/10.5281/zenodo.3565455.

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<em>Capital structure is a vital component of any business entity. The success and or failure of many business enterprises arise from their capital structures. Many financial institutions adopt different approaches regarding their capital structure arrangement. Some depend entirely on debt financing, others depend more on equity financing and others still mix the two approaches. The question has been which capital structure is the best for financial institutions?  For those firms which prefer mixing the two approaches, what would be the best portion for the two approaches? This paper crit

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Смирнова, Ирина Александровна, та Елена Борисовна Семенова. "Исследования издержек финансовой неустойчивости в рамках компромиссной теории структуры капитала". Journal of Corporate Finance Research / Корпоративные Финансы | ISSN: 2073-0438 1, № 3 (2010): 102–13. http://dx.doi.org/10.17323/j.jcfr.2073-0438.1.3.2007.102-113.

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Проблема оптимизации структуры капитала фирмы является одной из центральных в теории корпоративных финансов, а также играет определяющую роль при принятии решений по финансированию операционной деятельности и инвестиционных проектов. Инициаторами исследований в данной области стали [Modigliani & Miller,1958, 1963], которые в работах «The cost of capital, corporation finance and the theory of investment» и «Corporation income taxes and the cost of capital: A correction» попытались оценить влияние налоговых выгод, получаемых от долгового финансирования, на принятие фирмами решений относитель

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Jacob, Tom, and V. S. Ajina. "Capital Structure and Financial Performance of Pharmaceutical Companies in Indian Stock Exchange." Asian Journal of Managerial Science 9, no. 2 (2020): 24–30. http://dx.doi.org/10.51983/ajms-2020.9.2.1641.

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Capital Structure is an integral and important part of financial management having long term consequences. This paper tries to examine the impact of capital structure on the financial performance of Pharmaceutical companies in India. Capital structure is measured by the Debt Equity Ratio and firm performance as measured by Return on Equity. Regression Analysis is used to analyze the impact of capital structure on the financial performance of the pharmaceutical companies in India. The result indicates that the financial performance has no link with capital structure, which proves the Modigliani

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Brusov, P. N., T. V. Filatova, N. P. Orekhova, V. L. Kulik, S. I. Chang, and Y. C. G. Lin. "Modification of the Modigliani–Miller Theory for the Case of Advance Payments of Tax on Profit." Journal of Reviews on Global Economics 9 (June 2, 2020): 257–67. http://dx.doi.org/10.6000/1929-7092.2020.09.25.

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Frankfurter, George M., and George C. Philippatos. "Financial theory and the growth of scientific knowledge: From Modigliani and Miller to “an organizational theory of capital structure”." International Review of Financial Analysis 1, no. 1 (1992): 1–15. http://dx.doi.org/10.1016/1057-5219(92)90011-r.

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Ferdous, Lutfa T. "Capital Structure Theories in Finance Research: A Historical Review." Australian Finance & Banking Review 3, no. 1 (2019): 11–19. http://dx.doi.org/10.46281/afbr.v3i1.244.

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Capital structure in one of the most converse and vital issues in the finance literature. This theoretical review of capital structure provides a synthesis of the theory utilised in capital structure literature. This theoretical review explains two categories of theories that examine the optimum capital structure of a firm. Functional market theories, which propose firms conduct share transaction without being used transaction costs and ii) costly transaction theories. The first group consists of the original capital structure theories of Modigliani and Miller (1958, 1963), Miller (1977), and

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Ahmadinia, Hamed, Javad Afrasiabishani, and Hesami Elham. "A Comprehensive Review on Capital Structure Theories." Romanian Economic Journal XV, no. 45 (2012): 3–26. https://doi.org/10.5281/zenodo.15235717.

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The aim of this article is to provide a comprehensive review on different theories and hypothesis in regard with achieving an optimal capital structure. Many researchers believed that capital structure includes share issuance, private investment, bank debt, business debts, leasing contracts, tax debt, retirement debt, deferred compensation for executives and employees, deposits, product related-debt and other probable debt. These theories and hypothesis include: Net income, Net operational income, Traditional approach theory, Miller and Modigliani theory, Static trade–off theory, Asymmet

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Zarefar, Arumega, and Armadani Armadani. "DO FUNDAMENTAL FINANCIAL RATIOS AFFECT THE COMPANY'S STOCK PRICE? INDONESIA EVIDENCE." Jurnal Akuntansi dan Keuangan Indonesia 21, no. 1 (2024): 49–63. http://dx.doi.org/10.21002/jaki.2024.03.

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The objectives of this research aims to examine the effect of corporate fundamental financial ratios on stock prices and to examine whether firm age determine stock prices in the perspective of signaling theory. Here Generalized Least Squares (GLS) approach was used as the main analysis technique, and Ordinary Least Squares (OLS) was incorporated for the robustness test. The research was conducted on companies listed on the Indonesia Stock Exchange during the 2014-2020 period. This study finds that return on assets, solvency ratio, and Tobin's Q positively affect stock prices, that cash ratio

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Seyedimany, Arian. "Stock Price Reactions on NASDAQ Stock Exchange for Special Dividend Announcements." Emerging Science Journal 3, no. 6 (2019): 382–88. http://dx.doi.org/10.28991/esj-2019-01200.

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Announcing dividend pay-out policy by a company will signals market firm’s future prospects and changes its stock prices according to dividend signalling theory. By analysis the effect of special dividend announcements for 5 companies listed in NASDAQ for the period of 2014-2018, this study investigates the stock price reactions to special dividend announcement for 40 days around the event and challenges dividend signalling theory. The empirical results calculated both in discrete and logarithmic forms. Only few disordered significant abnormal returns and average abnormal returns occurred acco

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Ghafoor Awan, Prof Dr Abdul, Prof Dr ZahirFaridi, and Abdullahi ShahbazAnwer Ghaz. "DETERMINENTS OF CAPITAL STRUCTURE: EVIDENCE FROM PAKISTAN SUGAR INDUSTRY." INTERNATIONAL JOURNAL OF MANAGEMENT & INFORMATION TECHNOLOGY 11, no. 2 (2016): 2694–701. http://dx.doi.org/10.24297/ijmit.v11i2.4861.

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Capital structure is one of the most complex areas of financial decision making because of its inter-relationship with other financial decision variables. Poor capital structure decisions can result in a high cost of capital which decreases the value of a firm. Effective capital structure decisions decrease the cost of capital and hence the value of a firm increases.Â The objective of this empirical study is to analyze the factors affecting capital structure of sugar industry in Pakistan and to check whether the results confirm or not pecking order theory and trade-off theory. Different theori

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Brusov, Peter, Tatiana Filatova, Natali Orehova, and Nastia Brusova. "Weighted average cost of capital in the theory of Modigliani–Miller, modified for a finite lifetime company." Applied Financial Economics 21, no. 11 (2011): 815–24. http://dx.doi.org/10.1080/09603107.2010.537635.

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Clements, Ryan. "Trump's "Big-League" Tax Reform: Assessing the Impact of Corporate Tax Changes." Michigan Business & Entrepreneurial Law Review, no. 7.1 (2017): 1. http://dx.doi.org/10.36639/mbelr.7.1.trumps.

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This Article reviews and assesses corporate tax reforms advocated by President Donald Trump during his presidential campaign and signed into law since taking office (the Tax Cuts and Jobs Act of 2017), in light of economic theory and the Modigliani-Miller Irrelevance Theorem. The Article argues that companies will adapt policies in light of new taxation measures, thereby impacting the effectiveness of reform. In support of this conclusion, the Article surveys two empirical studies—one in relation to the repatriation efforts of President Bush’s Homeland Investment Act and another in relation to

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Kumar, Vijay, and Abdur Rahman Aleemi. "Financial Leverage And Firms Investment Decisions: Evidence from Banking Sector of Pakistan." JISR management and social sciences & economics 18, no. 2 (2020): 155–66. http://dx.doi.org/10.31384/jisrmsse/2021.18.2.10.

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This paper aims to find out the effects of financial leverage on firms’ investment decisions in the Banking Sector of Pakistan. Utilizing panel data techniques along with common effects, fixed effects, and random effects for listed banks from 2006 to 2013, the results indicate that leverage is having no significant effect on the investment decision of banks in Pakistan and hence we support Modigliani and Miller (1958) proposition of Irrelevance theory. To current study is going to provide useful insights to banks and investors that investment decision is irrelevant to the way company is financ

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Kumar, Vijay, and Abdur Rahman Aleemi. "Financial Leverage And Firms’ Investment Decisions: Evidence from Banking Sector of Pakistan." Journal of Independent Studies and Research-Management, Social Sciences and Economics 18, no. 2 (2020): 163–74. http://dx.doi.org/10.31384/jisrmsse/2020.18.2.10.

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This paper aims to find out the effects of financial leverage on firms’ investment decisions in the Banking Sector of Pakistan. Utilizing panel data techniques along with common effects, fixed effects, and random effects for listed banks from 2006 to 2013, the results indicate that leverage is having no significant effect on the investment decision of banks in Pakistan and hence we support Modigliani and Miller (1958) proposition of Irrelevance theory. To current study is going to provide useful insights to banks and investors that investment decision is irrelevant to the way company is financ

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Brusov, Peter, Tatiana Filatova, and Andrey Kashirin. "An Assessment of the Financial Indicators of PJSC Gazprom." Journal of Risk and Financial Management 16, no. 7 (2023): 339. http://dx.doi.org/10.3390/jrfm16070339.

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This assessment of the financial performance of PJSC Gazprom was carried out within the framework of modern theories of the cost of capital and capital structure: the Brusov–Filatova–Orekhova (BFO) theory and the Modigliani–Miller (MM) theory. Various methods for estimating the main parameter of both theories (BFO and MM), k0, the cost of equity, and WACC at zero leverage are discussed and applied. The analysis is based on data from official financial statements of PJSC Gazprom for the period from 2018 to 2022. Using the calculated values of k0, the main financial indicators were estimated, su

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Ilie, Livia, and Diana Vasiu. "Capital Structure and Profitability. The Case of Companies Listed in Romania." Studies in Business and Economics 17, no. 3 (2022): 100–112. http://dx.doi.org/10.2478/sbe-2022-0049.

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Abstract Alongside with the acquisition and the efficient use of assets (investment decision and asset management), financial managers are concerned with their financing. The capital structure of a company is of interest not only for practitioners but also for theorists so that in the last six decades important theories were developed from the capital structure irrelevance theory of Modigliani and Miller to theories that include market imperfections and incentives into the models (the static trade-off theory, the pecking order theory). In practice, financial managers take into account not only

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Phungeh, Dinah Gembom, Dongho Wamba Tejio Willi Verlaine, and Takoulac Kamta Marcel. "An evaluation of miller and Modigliani dividend policy irrelevance theory in selected firms in the Cameroon telecommunication industry." International Journal of Research in Finance and Management 6, no. 2 (2023): 169–76. http://dx.doi.org/10.33545/26175754.2023.v6.i2b.265.

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Çerkezi, Mr Sc Anila. "A literature review of the trade−off theory of capital structure." ILIRIA International Review 3, no. 1 (2013): 125. http://dx.doi.org/10.21113/iir.v3i1.103.

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Starting with Modigliani and Miller theory of 1958, capital structure has attracted a lot of attention from different scholars. The main question that they raised where: How do firms choose their capital structure or leverage? Does firm have a target capital structure? What are the main firm’s specific factors or determinants that influence the choice of capital structure? Does the economic conditions of the country (GDP growth rate, inflation rate, base lending rate etc.) influence on the determination of the firm’s level of debt? This paper provides a survey of the literature on trade off th

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Kowerski, Mieczysław, and Laura Haniewska. "The Miller–Modigliani dividend irrelevance theory as a warning for investors looking for quick profits from investments in companies paying dividends." Financial Internet Quarterly 18, no. 4 (2022): 77–88. http://dx.doi.org/10.2478/fiqf-2022-0029.

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Abstract In 1961, Miller and Modigliani (M–M) published a dividend irrelevance theory, which shows that the payment of dividends does not make any changes to the value of the company. The assumption about the existence of the perfect market made by M–M became the basis for a common criticism of the theory, and the critics also tried to empirically prove that dividend payments have a positive effect on future stock prices. A different interpretation was presented by Damodaran (2007), who stated that a dividend is a compensation for lost capital gains on the first day without a dividend. The aim

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Abeywardhana, D. K. Y. "Capital Structure Theory: An Overview." Accounting and Finance Research 6, no. 1 (2017): 133. http://dx.doi.org/10.5430/afr.v6n1p133.

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Capital structure is still a puzzle among finance scholars. Purpose of this study is to review various capital structure theories that have been proposed in the finance literature to provide clarification for the firms’ capital structure decision. Starting from the capital structure irrelevance theory of Modigliani and Miller (1958) this review examine the several theories that have been put forward to explain the capital structure.Three major theories emerged over the years following the assumption of the perfect capital market of capital structure irrelevance model. Trade off theory assumes

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Elkhal, Khaled. "Business uncertainty and financial leverage: should the firm double up on risk?" Managerial Finance 45, no. 4 (2019): 536–44. http://dx.doi.org/10.1108/mf-10-2018-0491.

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Purpose The purpose of this paper is to examine the nature of the relationship between business risk and financial leverage. While past theoretical and empirical studies on this topic use similar variables, overall, their findings are inconclusive. In this paper, the author contends this is partially due to inappropriate proxies for business risk that are commonly used in these research papers. To correct for this misspecification, this paper proposes an alternative proxy for business risk that is isolated from the effects of financial leverage. Design/methodology/approach Past research on the

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NWOKOYE, Gladys Anwuli (Ph.D), Babatunde Oshobuye FESTUS, and Nosa OMOREGIE. "Does Modigliani and Miller Relevance and Irrelevance Theory of Capital Structure Apply Among Non – Finance Quoted Companies in Ghana?" Account and Financial Management Journal 07, no. 04 (2022): 2695–708. https://doi.org/10.5281/zenodo.6406920.

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Abstract This study tests the applicability of Miller and Modigliani relevance and irrelevance theories for a set of 15 companies in Ghana using that for the period 2010 to 2019. The test procedure invoved examining how debt to equity ratios affect the value of the firms in the market, including how tax shield provided from debt accumulation improves the firms’ value. The result from the empirical analysis shows that neither the irrelevance nor the relevance theory is prevalent among the quoted firms in the non-finance sector in Ghana over the reference period. Empirical evidence also in

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Obayagbona, Joel, and Jennifer U. Omodamwen. "Testing The M & M Relevance and Irrelevance Theories of Capital Structure in Quoted Manufacturing Firms in Nigeria." European Journal of Economics 2, no. 2 (2022): 1–12. http://dx.doi.org/10.33422/eje.v2i2.176.

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The study empirically test the Miller & Modigliani (1958, 1961) irrelevance and relevance theory of capital structure in Nigeria. Thus, 16 manufacturing firms listed on the Nigerian Stock Market for the period 2010 to 2020 were tested. Three capital structure variables such as short-term debt to equity ratio, long-term debt to equity ratio and total debt-to-equity ratio (independent variables) were regressed against firm value (dependent variable). The fully modified ordinary least squares (FMOLS) was employed in the analysis of the data, and the empirical results obtained from the two mod

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Melching, Konstantin, and Tristan Nguyen. "On the Impact of Dividend Payments on Stock Prices - an Empirical Analysis of the German Stock Market." Studies in Business and Economics 16, no. 1 (2021): 255–69. http://dx.doi.org/10.2478/sbe-2021-0020.

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Abstract This paper examines the relation between dividend payments and stock prices of all firms in the German prime standard DAX 30 in the time period from 2012 to 2019. The irrelevance theory introduced by Miller and Modigliani states that dividend payments must not have an impact on stock prices in a perfect market. In contrast, the signaling theory and the dividend puzzle indicate that dividend payments are likely to have a profound impact on the stock price. According to our findings the ex-dividend decrease of stock prices was significantly smaller than the dividend payment. Nevertheles

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