A study of the financial leverage technique employed by listed companies in Hong Kong

Pao Yue-kong Library Electronic Theses Database

A study of the financial leverage technique employed by listed companies in Hong Kong

 

Author: Lo, Yuen-yee Anne
Title: A study of the financial leverage technique employed by listed companies in Hong Kong
Degree: M.B.A.
Year: 1993
Subject: Corporations -- China -- Hong Kong -- Finance
Leveraged buyouts -- China -- Hong Kong
Corporate debt -- China -- Hong Kong
Hong Kong Polytechnic -- Dissertations
Department: Dept. of Management
Pages: iv, 60 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1150959
URI: http://theses.lib.polyu.edu.hk/handle/200/3289
Abstract: This project aims at finding out the actual practice by listed companies in Hong Kong in respect of their captial structure policies and strategies. While academic researches tend to support the theory of the existence of an optimal capital structure which simultaneously maximizes the firm's value and minimizes its average cost of capital, this project tries to find out whether listed companies in Hong Kong actually put this theory into practice. This project also tries to find out whether there is inter-industry difference in respect of the optimal capital structure for companies in different industries. Findings from this project reveal that listed companies in Hong Kong are comparatively low geared as compared with companies in other countries. The findings also suggest a generally rising trend of gearing ratios for listed companies in Hong Kong which may suggest that listed companies in Hong Kong have not yet achieved their respective optimal capital structures so that they are increasing the use of debt financing to increase the firms' value. However, the findings fail to provide conclusive evidence as to the existence of inter-industry difference.

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