Abstract: The study focuses on the relationship between the capital structure and the value of firm, many theories in the past propagated about their association and state capital structure does affect the enterprise value. Present study is an effort to test the effect of capital structure on value of enterprise. According to academic and pragmatic research there is an optimal capital structure, there is no specified methodology, yet, that financial managers can use in order to achieve an optimal debt level. However, financial theory do facilitate in understanding how the selected financing mix affects the firm’s value. The various financing decisions are essential for the financial benefit of the firm. A forged decision about the capital structure may lead to financial suffering and ultimately to insolvency. The management of a firm sets its capital structure in a way that firm’s value is maximized. However, firms do choose diverse financial leverage levels in their effort to get an optimal capital structure. Existing empirical research on capital structure and firm value has been largely confined to the United States and a few other advanced countries. Thus an attempt has been made to study Indian corporates
Keywords: Enterprise Value, Financial leverage, Capital Structure, optimal capital structure.
Title: Enterprise Value and Capital Structure an Indian Sector Research Report
Author: Neha Poddar
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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