What is the benefit of Debt to the value of the firm, and what is the optimal of debt equity ratio?
BusinessI need a scientific research paper that studies the effect of debt to the value of the firms and what is the optimal Debt/Equity ratio meaning how much debt firms should undertake in terms of the financial structure to finance an investment opportunity its relation to the financial distress
the research should include a review and a discussion of 8 scientific and published articles written in regards of the same topic. also, it should include graphs, the articles details (author, date, name) should be (referenced, listed).
the structure of the research is shown as listed below: the research is required ASAP
1- Executive summary
2- key to abbreviations
3- Ch01: Introduction
History (Bibliography of authors, previous work done, what triggered such study)
Related Theories (such as Trade-off theory, & Pecking order theory)
4- Ch02: literature review
Introduction (should explain the chapter purpose and content
etc)
Theoretical Model
Empirical Model
Samples
Contributions
Findings
Conclusion
5- Ch3: Data and Methodology
Introduction (should explain the chapter purpose and content
etc)
selection criteria (variables
Data Analysis Methods
Conclusion
6- ch4: Analysis & results
Introduction (should explain the chapter purpose and content
etc)
suggested sample (based on KSA:Saudi Arabia market)
suggested Model
Conclusion (includes recommendation
7- References
8- Appendix
Solution Preview
EXECUTIVE SUMMARY
The objective of this study is to determine if there exists a significant relationship between debt to equity ratio and the value of the firm and also determine the effect of debt to equity ratio to the value of the firm. A group 12 Saudi Arabian companies listed on the Saudi stock market (Tadawul) were selected and their financial ratios obtained in the year 2015. Data of the 12 companies was obtained from the Arab Stocks Markets Analysis website. The companies profitability ratios like return on assets (ROA) and return on equity (ROE) were used as dependent variables to represent the measure of their value. The debt to equity ratios of the companies were used as independent variables. A combination of both descriptive and inferential statistics techniques were used to determine the data patterns and make conclusions about the data respectively. A correlation analysis indicates that there is a negative relationship between debt to equity ratio and return on assets and a positive relationship between debt to equity ratio and return on equity. The correlation co-efficient between debt to equity ratio and return on assets and return on equity is -0.47497244 and 0.090239507 respectively. The regression analysis indicates that the relationship between debt to equity ratio and return on assets is insignificant because of a p value of 0.12 which is above 0.05 at 95% confidence interval. The regression results also show that the relationship between debt to equity ratio is significant with a p value of 0.0001 which is lower than 0.05 at 95% confidence interval.
(6,316 words)
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