The Impact of Debt Capacity on Firm’s Growth

American Journal of Scientific Research, Issue 59, 2012

7 Pages Posted: 3 Jun 2012

See all articles by Dr. Irfan Hameed

Dr. Irfan Hameed

Iqra University

Athar Iqbal

affiliation not provided to SSRN

Naveed Ramzan

affiliation not provided to SSRN

Date Written: June 3, 2012

Abstract

This paper concerns with the financial choice of debt capacity as the source of capital and its impact on growth of the firm. This paper investigates the relationship of debt to asset ratio and market to book ratio. Simple liner regression is used between book leverage and Growth. Financial data of 53 non financial firms of last 8 years were selected from Karachi Stock Exchange100 Index. The result reveals a significant positive relation between the debt to asset ratio and market to book ratio. It shows that there is no negative impact of debt capacity on the firm’s growth.

Suggested Citation

Hameed, Irfan and Iqbal, Athar and Ramzan, Naveed, The Impact of Debt Capacity on Firm’s Growth (June 3, 2012). American Journal of Scientific Research, Issue 59, 2012, Available at SSRN: https://ssrn.com/abstract=2074379

Irfan Hameed (Contact Author)

Iqra University ( email )

Defence View, Phase-2
Karachi, Sindh
Pakistan

Athar Iqbal

affiliation not provided to SSRN

Naveed Ramzan

affiliation not provided to SSRN

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