Capital Structure and Firm Value of Selected Manufacturing Firms in India

Abstract

This empirical study adds to the current literature on the impact of capital structure decisions on business value.These 92 selected Manufacturing companies database for the period 2010-2021 include Automobile & ancillaries, Chemicals, Cement, Food, sugar & beverage, Metals & Mining, Pharmaceuticals, Tyres, Paints, Paper & Plastics, Construction, Real estate & Infrastructure, Capital Goods/Machinery, Power, Electrical & Electronics, Oil & Gas industries. Tobin's Q and the Enterprise value to profit before interest, depreciation, and taxes ratio are used to approximate company value. The debt-equity ratio is used to calculate leverage. The panel data regression model is used for the research, which supports the idea that financial leverage has a negative influence on company value (as assessed by Tobin's Q). The other measure, on the other hand, is unaffected by the