JOINT EFFECT OF DEBT FINANCING AND CREDIT RATING ON CORPORATION’S PERFORMANCE
Journal Title: Topics in Economics, Business and Management (EBM) - Year 2017, Vol 1, Issue 1
Abstract
The purpose of this paper is to examine the joint effect of debt financing and credit rating on the corporation’s performance. Using a sample of 309 US firm-year observations in the retail industry from year 2011 to 2013, we show that both debt financing and credit rating have positive relationships with corporate performance. Further, when a company has high credit rating, its debt financing ratio has no effect on its performance, while a company with low credit rating; it performs better as debt financing ratio increases. The findings can be applied by CFOs (Chief Finance Officers) in retail companies to build an efficient capital structure when considering the companies’ credit ratings. A good combination of these two enables firms to gain a bigger profit and attract more investors.
Authors and Affiliations
Wang Jianlong
Keywords
Related Articles
- EP ID EP412748
- DOI 10.26480/icemi.01.2017.21.23
- Views 96
- Downloads 0
COAL MINES AS A BARRIER TO THE DEVELOPMENT OF RENEWABLE ENERGY SOURCES – BY THE EXAMPLE OF POLAND
The article presents an analysis of mining restructuring programs in the possession of the state to check their effectiveness and their impact on changes in the energy sector. The state policy towards the Polish hard coa...
RESEARCH ON THE EVALUATION INDEX SYSTEM OF THE RISK MANAGEMENT LEVEL OF ASSET MANAGEMENT OF CHINA’S COMMERCIAL BANKS
Asset Management of China’s Commercial Banks will face more and more challenges from other financial institutions during the new era of asset management, which will inevitably lead to the reform of the asset management o...
ZERO-COUPON YIELD CURVE FOR NIGERIAN BOND MARKET
The Nigerian bond market has developed to become one of the most liquid in Africa. However, to the best of our knowledge, the Nigerian bond market does not currently have zero-coupon yield curve; what is available is the...
FROM “SHARING ECONOMY” TO NATIONAL CLOUD LIBRARY
In this paper, starting from the concept of Sharing economy, with the method of induction and analysis, point out that the concept of sharing coincides with the construction of library. Put forward the necessity of libra...
RESEARCH ON THE EFFICIENCY OF CULTURAL MANUFACTURING INDUSTRY IN CHINA BASED ON DEA-MALMUQUIST
The development of Cultural Manufacturing Industry is an important ingredient in cultural industry. And improving the efficiency of Culture Manufacturing Industry also helps promote the development of cultural industry....