RELEVANCE OF LEVERAGE AND PROFITABILITY IN RISKRETURN PARADOX A STUDY FROM PAKISTAN STOCK EXCHANGE

http://dx.doi.org/10.31703/gmsr.2020(V-II).02      10.31703/gmsr.2020(V-II).02      Published : Jun 2020
Authored by : Muhammad Ramzan , Maria Sultana , Muhammad Imran

02 Pages : 9-13

References

  • Abdullah, M. N., Parvez, K., Karim, T., & Tooheen, R. B. (2015). The impact of financial leverage and market size on stock returns on the Dhaka stock exchange: Evidence from selected stocks in the manufacturing sector. International Journal of Economics, Finance and Management Sciences, 3(1), 10-15.
  • Acheampong, P., Agalega, E., & Shibu, A. K. (2014). The effect of financial leverage and market size on stock returns on the Ghana Stock Exchange: evidence from selected stocks in the manufacturing sector. International journal of financial research, 5(1), 125.
  • Adewale, M. T., & Ajibola, O. B. (2013). Does Capital Structure Enhance Firm Performance? Evidence from Nigeria. IUP Journal of Accounting Research & Audit Practices, 12(4).
  • Ahmad, H. (2013). The Co-determinants of Capital Structure and Stock Returns: Evidence from the Karachi Stock Exchange Hamid Ahmad, Bashir A. Fida and Muhammad Zakaria. Lahore Journal of Economics, 18(1), 81-92.
  • Basit, A., & Hassan, Z. (2017). Impact of capital structure on firm's performance: a study on Karachi Stock Exchange (KSE) listed firms in Pakistan. Basit, A., & Hassan, (2017), 118-135.
  • Bhandari, L. C. (1988). Debt/equity ratio and expected common stock returns: Empirical evidence. The journal of finance, 43(2), 507-528.
  • Chandra, T. (2016). The Influence of Leadership Styles, Work Environment and Job Satisfaction of Employee Performance- -Studies in the School of SMPN 10 Surabaya. International Education Studies, 9(1), 131-140.
  • Chang, C., Chen, X., & Liao, G. (2014). What are the reliably important determinants of capital structure in China?. Pacific-Basin Finance Journal, 30, 87-113.
  • Chen, J. S., Chen, M. C., Liao, W. J., & Chen, T. H. (2009). Influence of capital structure and operational risk on profitability of life insurance industry in Taiwan. Journal of Modelling in Management.
  • Chisti, K. A., Ali, K., & Sangmi, M. I. D. (2013). Impact of capital structure on profitability of listed companies (evidence from India). The USV Annals of Economics and Public Administration, 13(1 (17)), 183-191.
  • Dawar, V. (2014). Agency theory, capital structure and firm performance: some Indian evidence. Managerial Finance.
  • Dhaliwal, D., Heitzman, S., & ZHEN LI, O. L. I. V. E. R. (2006). Taxes, leverage, and the cost of equity capital. Journal of Accounting Research, 44(4), 691-723.
  • Gough, O., & Adami, R. (2013). Saving for retirement: a review of ethnic minorities in the UK. Social Policy and Society, 12(1), 147-161.
  • Eugene, F., Fama, Kenneth, R., & French. (2014) First draft: June 2013 This draft: August 2014 A Five-Factor Asset Pricing Model. (August).
  • Fama, E. F., French, K. R. (2015) A five-factor asset pricing model. J. financ. econ. 116(1), 1-22.
  • Ferguson, M. F., & Shockley, R. L. (2003). Equilibrium
  • Gill, A., Biger, N., & Mathur, N. (2011). The effect of capital structure on profitability: Evidence from the United States. International Journal of Management, 28(4), 3.
  • Goyal, A. M. (2013). Impact of capital structure on performance of listed public sector banks in India. International journal of business and management invention, 2(10), 35-43.
  • George, T. J., & Hwang, C. Y. (2010). A resolution of the distress risk and leverage puzzles in the cross section of stock returns. Journal of financial economics, 96(1), 56-79.
  • Habib, H., Khan, F., & Wazir, M. (2016). Impact of debt on profitability of firms: Evidence from non-financial sector of Pakistan. City University Research Journal, 6(01).
  • Hermuningsih, S. (2013). Profitability, growth opportunity, capital structure and the firm value. Buletin Ekonomi Moneter Dan Perbankan, 16(2), 115-136.
  • Işık, Ö. (2017). Determinants of profitability: Evidence from real sector firms listed in Borsa Istanbul. Business and Economics Research Journal, 8(4), 689-698.
  • Khan, W., Naz, A., Khan, M., Khan, W., & Ahmad, S. (2013). The impact of capital structure and financial performance on stock returns 'a case of Pakistan textile industry. Middle-East Journal of Scientific Research, 16(2), 289-295.
  • Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance and the theory of investment. The American economic review, 48(3), 261-297.
  • Modigliani, F., & Miller, M. H. (1963). Corporate income taxes and the cost of capital: a correction. The American economic review, 53(3), 433-443
  • Muradoglu, G., & Sivaprasad, S. (2008). An empirical test on leverage and stock returns. Retrieved April, 24, 2012.
  • Muradoglu, G., Sivaprasad, S., & Ullah, G. W. (2015, June). The impact of firm internationalization on the relation between leverage and market performance. In 22nd Annual Conference of the Multinational Finance Society, Halkidiki, June 28-July 1,
  • Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of financial economics, 13(2), 187-221.
  • Nawazish, M., Saeed, M. S., & Rizvi, K. A. (2013). The pricing of size, book to market and financial leverage in Euro stocks. Economic research-Ekonomska istraživanja, 26(2), 177-190.
  • Odusanya, I. A., Yinusa, O. G., & Ilo, B. M. (2018). Determinants of firm profitability in Nigeria: Evidence from dynamic panel models. SPOUDAI-Journal of Economics and Business, 68(1), 43-58.
  • Pandya, B. (2016). Impact of financial leverage on market value added: empirical evidence from India. Journal of Entrepreneurship, Business and Economics, 4(2), 40-58.
  • Penman, S. H., Richardson, S. A., & Tuna, I. (2007). The book-to-price effect in stock returns: accounting for leverage. Journal of accounting research, 45(2), 427-467.
  • Sheikh, N. A., & Wang, Z. (2013). The impact of capital structure on performance. International Journal of commerce and Management.
  • Xin, W. Z. (2014). The impact of ownership structure and capital structure on financial performance of Vietnamese firms. International Business Research, 7(2), 64.
  • Yang, C. C., Lee, C. F., Gu, Y. X., & Lee, Y. W. (2010). Co-determination of capital structure and stock returns - A LISREL approach: An empirical test of Taiwan stock markets. The quarterly review of economics and finance, 50(2), 222-233.
  • Zeitun, R., & Tian, G. G. (2007). Does ownership affect a firm's performance and default risk in Jordan?. Corporate Governance: The international journal of business in society
  • Abdullah, M. N., Parvez, K., Karim, T., & Tooheen, R. B. (2015). The impact of financial leverage and market size on stock returns on the Dhaka stock exchange: Evidence from selected stocks in the manufacturing sector. International Journal of Economics, Finance and Management Sciences, 3(1), 10-15.
  • Acheampong, P., Agalega, E., & Shibu, A. K. (2014). The effect of financial leverage and market size on stock returns on the Ghana Stock Exchange: evidence from selected stocks in the manufacturing sector. International journal of financial research, 5(1), 125.
  • Adewale, M. T., & Ajibola, O. B. (2013). Does Capital Structure Enhance Firm Performance? Evidence from Nigeria. IUP Journal of Accounting Research & Audit Practices, 12(4).
  • Ahmad, H. (2013). The Co-determinants of Capital Structure and Stock Returns: Evidence from the Karachi Stock Exchange Hamid Ahmad, Bashir A. Fida and Muhammad Zakaria. Lahore Journal of Economics, 18(1), 81-92.
  • Basit, A., & Hassan, Z. (2017). Impact of capital structure on firm's performance: a study on Karachi Stock Exchange (KSE) listed firms in Pakistan. Basit, A., & Hassan, (2017), 118-135.
  • Bhandari, L. C. (1988). Debt/equity ratio and expected common stock returns: Empirical evidence. The journal of finance, 43(2), 507-528.
  • Chandra, T. (2016). The Influence of Leadership Styles, Work Environment and Job Satisfaction of Employee Performance- -Studies in the School of SMPN 10 Surabaya. International Education Studies, 9(1), 131-140.
  • Chang, C., Chen, X., & Liao, G. (2014). What are the reliably important determinants of capital structure in China?. Pacific-Basin Finance Journal, 30, 87-113.
  • Chen, J. S., Chen, M. C., Liao, W. J., & Chen, T. H. (2009). Influence of capital structure and operational risk on profitability of life insurance industry in Taiwan. Journal of Modelling in Management.
  • Chisti, K. A., Ali, K., & Sangmi, M. I. D. (2013). Impact of capital structure on profitability of listed companies (evidence from India). The USV Annals of Economics and Public Administration, 13(1 (17)), 183-191.
  • Dawar, V. (2014). Agency theory, capital structure and firm performance: some Indian evidence. Managerial Finance.
  • Dhaliwal, D., Heitzman, S., & ZHEN LI, O. L. I. V. E. R. (2006). Taxes, leverage, and the cost of equity capital. Journal of Accounting Research, 44(4), 691-723.
  • Gough, O., & Adami, R. (2013). Saving for retirement: a review of ethnic minorities in the UK. Social Policy and Society, 12(1), 147-161.
  • Eugene, F., Fama, Kenneth, R., & French. (2014) First draft: June 2013 This draft: August 2014 A Five-Factor Asset Pricing Model. (August).
  • Fama, E. F., French, K. R. (2015) A five-factor asset pricing model. J. financ. econ. 116(1), 1-22.
  • Ferguson, M. F., & Shockley, R. L. (2003). Equilibrium
  • Gill, A., Biger, N., & Mathur, N. (2011). The effect of capital structure on profitability: Evidence from the United States. International Journal of Management, 28(4), 3.
  • Goyal, A. M. (2013). Impact of capital structure on performance of listed public sector banks in India. International journal of business and management invention, 2(10), 35-43.
  • George, T. J., & Hwang, C. Y. (2010). A resolution of the distress risk and leverage puzzles in the cross section of stock returns. Journal of financial economics, 96(1), 56-79.
  • Habib, H., Khan, F., & Wazir, M. (2016). Impact of debt on profitability of firms: Evidence from non-financial sector of Pakistan. City University Research Journal, 6(01).
  • Hermuningsih, S. (2013). Profitability, growth opportunity, capital structure and the firm value. Buletin Ekonomi Moneter Dan Perbankan, 16(2), 115-136.
  • Işık, Ö. (2017). Determinants of profitability: Evidence from real sector firms listed in Borsa Istanbul. Business and Economics Research Journal, 8(4), 689-698.
  • Khan, W., Naz, A., Khan, M., Khan, W., & Ahmad, S. (2013). The impact of capital structure and financial performance on stock returns 'a case of Pakistan textile industry. Middle-East Journal of Scientific Research, 16(2), 289-295.
  • Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance and the theory of investment. The American economic review, 48(3), 261-297.
  • Modigliani, F., & Miller, M. H. (1963). Corporate income taxes and the cost of capital: a correction. The American economic review, 53(3), 433-443
  • Muradoglu, G., & Sivaprasad, S. (2008). An empirical test on leverage and stock returns. Retrieved April, 24, 2012.
  • Muradoglu, G., Sivaprasad, S., & Ullah, G. W. (2015, June). The impact of firm internationalization on the relation between leverage and market performance. In 22nd Annual Conference of the Multinational Finance Society, Halkidiki, June 28-July 1,
  • Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of financial economics, 13(2), 187-221.
  • Nawazish, M., Saeed, M. S., & Rizvi, K. A. (2013). The pricing of size, book to market and financial leverage in Euro stocks. Economic research-Ekonomska istraživanja, 26(2), 177-190.
  • Odusanya, I. A., Yinusa, O. G., & Ilo, B. M. (2018). Determinants of firm profitability in Nigeria: Evidence from dynamic panel models. SPOUDAI-Journal of Economics and Business, 68(1), 43-58.
  • Pandya, B. (2016). Impact of financial leverage on market value added: empirical evidence from India. Journal of Entrepreneurship, Business and Economics, 4(2), 40-58.
  • Penman, S. H., Richardson, S. A., & Tuna, I. (2007). The book-to-price effect in stock returns: accounting for leverage. Journal of accounting research, 45(2), 427-467.
  • Sheikh, N. A., & Wang, Z. (2013). The impact of capital structure on performance. International Journal of commerce and Management.
  • Xin, W. Z. (2014). The impact of ownership structure and capital structure on financial performance of Vietnamese firms. International Business Research, 7(2), 64.
  • Yang, C. C., Lee, C. F., Gu, Y. X., & Lee, Y. W. (2010). Co-determination of capital structure and stock returns - A LISREL approach: An empirical test of Taiwan stock markets. The quarterly review of economics and finance, 50(2), 222-233.
  • Zeitun, R., & Tian, G. G. (2007). Does ownership affect a firm's performance and default risk in Jordan?. Corporate Governance: The international journal of business in society

Cite this article

    APA : Ramzan, M., Sultana, M., & Imran, M. (2020). Relevance of Leverage and Profitability in Risk-Return Paradox: A Study from Pakistan Stock Exchange. Global Management Sciences Review, V(II), 9-13. https://doi.org/10.31703/gmsr.2020(V-II).02
    CHICAGO : Ramzan, Muhammad, Maria Sultana, and Muhammad Imran. 2020. "Relevance of Leverage and Profitability in Risk-Return Paradox: A Study from Pakistan Stock Exchange." Global Management Sciences Review, V (II): 9-13 doi: 10.31703/gmsr.2020(V-II).02
    HARVARD : RAMZAN, M., SULTANA, M. & IMRAN, M. 2020. Relevance of Leverage and Profitability in Risk-Return Paradox: A Study from Pakistan Stock Exchange. Global Management Sciences Review, V, 9-13.
    MHRA : Ramzan, Muhammad, Maria Sultana, and Muhammad Imran. 2020. "Relevance of Leverage and Profitability in Risk-Return Paradox: A Study from Pakistan Stock Exchange." Global Management Sciences Review, V: 9-13
    MLA : Ramzan, Muhammad, Maria Sultana, and Muhammad Imran. "Relevance of Leverage and Profitability in Risk-Return Paradox: A Study from Pakistan Stock Exchange." Global Management Sciences Review, V.II (2020): 9-13 Print.
    OXFORD : Ramzan, Muhammad, Sultana, Maria, and Imran, Muhammad (2020), "Relevance of Leverage and Profitability in Risk-Return Paradox: A Study from Pakistan Stock Exchange", Global Management Sciences Review, V (II), 9-13
    TURABIAN : Ramzan, Muhammad, Maria Sultana, and Muhammad Imran. "Relevance of Leverage and Profitability in Risk-Return Paradox: A Study from Pakistan Stock Exchange." Global Management Sciences Review V, no. II (2020): 9-13. https://doi.org/10.31703/gmsr.2020(V-II).02