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Capital Structure and Gearing

E/F/74. The Signalling model by Ross (1977) suggests that an increase in gearing should lead to a rise in share price as managers are signalling their increased optimism. Arnold 1998. Discuss

WORDS:
1000
DATE:
2006
PRICE:
19.99 GBP

The paper examines theoretical approaches to company's capital structure (CS) discussing the theory by Merton Millar and Franco Modigliani (MM), the traditional theory of capital structure, the signalling theory by Ross (1977), the agency theory, etc.

 

KEYWORDS: f, signalling, model, ross, suggests, increase, gearing, lead, rise, share, price, managers, signalling, increased, optimism, arnold, discuss,