Assistant Professor, Gmn College, Ambala, India
Online published on 8 February, 2019.
This paper is devoted to the description of the results regarding the most debatable issue in the area of financial management-that is impact of leverage on the value and performance of the firms. For drawing the conclusion, three regression equations were fit. “Market to book value ratio” was taken as a proxy to the value of firm, whereas “return on assets” and “return on equity” were considered as measures of performance of the selected firms. The study aims to analyze whether D/E ratio and D/TA ratio exert influence on value of firm or not. Lastly, the study will indicate whether a positive or negative relationship exists between ROE and the three independent factors-debt equity ratio, debt to total assets ratio and size of the firm or not.
Debt-Equity ratio (D/E), debt to total assets ratio ⁻D/E/TA), “Market to book value ratio”
