Impact of Capital Structure and Dividend Policy on Firm value of select Pharmaceutical companies in India
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Date
2023-11
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Avinashilingam
Abstract
The major objective of any organization is to attain the optimal capital structure
and the proper dividend decision which enhances the firm value.It was always a challenge
to make a proper decision and it is also a vital issue in corporate finance.Capital structure
and dividend policy are the examples of financing and investment decisions that affect the
level of funds available in the firm. So, this study is conducted, to examine the impact of
capital structure and dividend policy on firm value of select Pharmaceutical Companies in
India.This research study has selected 31 companies belonging to Pharmaceutical industry
in India. It is categorized into three sections; Large Capital Companies, Mid Capital
Companies and Small Capital Companies. These sample companies were selected on the
basis of Average Market Capitalization and their enlistment in BSE. The Descriptive
Statisitics, Correlation, Multiple Regression Analysis, Panel Data Regression Analysis,
Compound Annual Growth Rate and Trend Analysis were the tools used to analyze the
data from 2007 to 2021.This study also gives a theoretical contribution to the future
researchers. From the research the analysis indicates confirmation of Pecking Order
Theory and Trade off Theory in the case of capital structure and the Dividend Relevance
Theory according to the dividend policy of select Pharmaceutical Companies in India
This research study findings on implementation will enhance the financial strength
and financial stability in Pharmaceutical Industry. This industry will contribute
significantly to the economic development of India.
Keywords : Capital Structure, Dividend Policy, Firm Value, Panel Data Regression and
Pharmaceutical Companies in India.
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Commerce