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Capital Structure and Gearing

C/F/772. Proposal. Dynamic structure of the capital structure in the UK

WORDS:
700
DATE:
2010
PRICE:
9.99 GBP

This is a proposal aiming to evaluate how the economic uncertainty brought by the financial crisis has affected the structure of capital. The questions to be answered will include: Is there a theoretical reasoning for a change in the corporate capital structure as a consequence of a financial crisis? Is there evidence that supports an actual change in the capital structure and relate it to the financial crisis? What arguments can be proposed to explain why companies were led to change their capital structure as a result of the financial crisis? If the origin of the financial crisis is in the banking industry what are the mechanisms that led it to spread to other non-financial industries? In order to evaluate the capital structure of the UK firms, data will be collected from their annual reports.

 

KEYWORDS: Capital structure, Modigliani and Miller theorem, financial crisis, economic uncertainty,