Search Results for capital-structure
Abstract
Capital structure is considered a fundamental topic in the field of financial management due to its vital role in supporting corporate financial decisions and its direct impact on financial performance and returns. This study aims to analyze the role of capital structure indicators on abnormal stock returns, with a specific focus on industrial companies listed on the Iraq Stock Exchange, as these returns serve as important indicators of market efficiency and the influence of financial decisions.
The study addresses the relationship between the components of capital structures such as debt and equity—and deviations in stock returns from expected values. These deviations may reflect unexpected opportunities or additional risks borne by investors. The research problem was formulated through inquiries into the impact of the financing mix used by companies on abnormal returns, as well as the extent to which these returns are affected by financial risk and the environmental challenges faced by the Iraqi market.
The significance of this study lies in its attempt to explain how changes in financial leverage influence abnormal returns. It also provides practical indicators that enhance the efficient use of financial resources and help investors gain a better understanding of how to evaluate their returns and expectations based on the components of capital structure. Furthermore, the study seeks to offer insights and recommendations that support financial decision-makers in choosing a balanced capital structure that contributes to growth and risk reduction. The study adopts an analytical approach that integrates theoretical foundations with empirical measurement of financial leverage indicators and abnormal returns, by analyzing data from a sample of listed industrial companies.
Abstract
The research aims to understand the change in capital structure and its impact on financial stability, clarifying its features for decision-makers, thus enabling them to make sound decisions, especially investors. One of the most important objectives of the research was to determine the financial stability of the research sample during the research period, relying on the Altman model adopted in the financial stability process. The sample included five banks: (Bank of Baghdad, Bank of Babylon, Gulf Bank, United Investment Bank, and Sumer Bank). The research period was from 2015 to 2019. The researchers relied on financial analysis to present the results and clarify the nature of the relationship between the two variables. They reached a number of results, the most important of which is that the change in capital structure leads to an impact on the financial stability of the banks in the research sample. One of the most important recommendations reached by the research is the necessity of maintaining the capital structure from changes affecting it by relying on attracting investors, especially from outside the country.