Financial Conservatism, Capital Structure & their impact on Firm Value. A Comparison between UK and Italian firms

      Аннотация: This book differentiates financially conservative firms from non-conservative firms and investigates how financially conservative and capital structure policies affect their firm values. A firm is said to be financially conservative if it has high cash holdings as a protection against future financial constraints. Using two samples of UK and Italian firms from 1995 to 2013, I have provided evidence that financially conservative firms, even though are cash rich and / or have low levels of debt, do not have the highest firm values due to the effects of tax shield associated with interest on debt. A detailed comparison has been made between active UK and Italian firms to illustrate this.

Ключевые слова: Capital Structure, cash holding, COST OF DEBT, cost of equity, debt, Econometric modeling, EU, Finance, Italy, Leverage, Logistic Regression, Market Value, Shareholder Value, UK, Valuation, Value of firm, financial conservatism, debt equity mix, interest on debt, tax shield, market capitalization rate, Modigliani and Miller, marginal effect