Discussion of 'The Impact of Dividends, Debt, and Investment on Valuation Models.' (response to William P. Reese in this issue, p. 1111)

Article Abstract:

The results of a study on dividends and valuation models are criticized because of the insufficient distinction given between dividends and earnings and the inconsistent evidence on the value relevance of debt. The manner by which the study handled the other corporate financial variables in the UK were questioned because the models used did not distinguish the risk and the earnings permanence roles of dividends although comprehensive equations were presented. Further studies for unresolved issues concerning corporate finance variables are thus suggested.

Debt & Capital Management, Dividends, Analysis, Capital investments, Debt financing (Corporations), Debt financing

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Strategy and financial policy in UK small firms

Article Abstract:

The relationship between corporate strategy and capital structure has been studied in the context of large companies, but very little research has been done on its affect on small firms. Much like larger enterprises, corporate strategy plays an important part in the determination of capital structure of smaller companies. The mix of debt and equity is especially important in relation to the failure of small and medium sized enterprises.

Small Business, Financial Management, United Kingdom, Research, Finance

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