| dc.description.abstract | The market value of a firm is influenced by various factors.
The market value movement is based on the firm’s
fundamentals, market efficiency, macroeconomic
indicators and perception of the investors. Several studies
have proven that market value of firms are explained by its
capital structure. In line with that the study conducted to
find out the Impact of Capital Structure on Market Value in
Listed Food and Beverage Tobacco companies in Colombo
Stock Exchange (CSE) for the period from 2011- 2017. The
study incorporated 18 companies out of 23 companies
listed in Colombo Stock Exchange under Beverage Food and
Tobacco industry using simple random sampling method. It
analyzes the relationship between market value and capital
structure by employing panel least square method
approach. Debt to Equity ratio is considered as the
independent variable and the market value of the company
is considered as the dependent variable for the purpose of
this study. Based on the regression analysis, the results
show a positive relationship between debt to equity ratio of
the companies and market value. The results were
statistically significant at 5% level of significance. Also, the
results indicate that adding more debt to overall capital
positively affects the market value of the company. The
results therefore suggest that the firms are with higher
market capitalization is incorporating more debt into their
capital structure in Food, Beverage and Tobacco Sector in
CSE. | |
