The correlation between capital structure and shareholder value for companies listed in Ho Chi Minh stock exchange (HOSE)

Abstract

The capital structure decision is the important one since the shareholder value of the firm is specifically affected by such decisions. It is irrelevant that benefit ought to be the main objective for a firms. Profit maximization is part of the wealth creation process. Where, wealth maximization is a long haul process. It implies to the value of the firm and it is expressed in the value of stock. Hence, this study has aimed a research of the influences of capital structure on the shareholder value of the listed HOSE companies over the past 5 years using a panel data methodology. Statistical methods such as descriptive statistics, correlation analysis and regression analysis were used in this research. Our results showed that the capital structure positively influences the firm’s shareholder value ( Market book value ). This study is significant in that it will add to the already existing researches on the influences of capital structure on the firm’s book value.