Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume that you are interested in examining the effect of earnings volatility (uncertainty) on firms target capital structure using a panel data of firms listed

Assume that you are interested in examining the effect of earnings volatility (uncertainty) on firms target capital structure using a panel data of firms listed on Palestine Exchange between 2012 and 2019. In light of your study of capital structure decisions, you think that earnings volatility is a determinant factor of capital structure. Moreover, you reason that earnings volatility effect on leverage targets is greater than the impact of firm size, market-to-book ratio, assets tangibility, R&D intensity, ..., and it is the most critical among all time-varying determinants of leverage targets. Further, you think that high level of uncertainty decreases debt tax shields, increases potential financial distress costs, and exacerbates debtholdershareholder conflicts, thereby leading to a lower optimal target of capital structure.

  1. What should be your testable hypotheses?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

Evaluate each expression. 5! 5!0!

Answered: 1 week ago

Question

d. Who are important leaders and heroes of the group?

Answered: 1 week ago