Capital Structure's Influence on Share Price Empirical Evidence from Banks listed in BSE SENSEX in India

Document Type : Primary Research paper

Authors

1 Ph.D. in finance, Assistant Professor TMIMT (TMU) Moradabad

2 Ph. D in Commerce, Professor, Jain University, Bengaluru

Abstract

The study is to understand the impact of capital structure i.e. the various sources of arranging long term finance on the share prices of the listed banks of BSE SENSEX. The study employed regression method of analysis to evaluate the impact of capital structure on share price of all listed Banks in BSE SENSEX in India by extracting data on capital structure for the period 2010 to 2019, a period of ten years. ANOVA was used to determine the suitable model and the test showed a significant results at 5% level of significance . The finding shows that the capital structure shows a significant impact on share price of 5 listed deposit money banks in BSE SENSEX in India. The results portrays capital structure to influence firm value. The study recommended that listed banks in BSE SENSEX in India should make an effort to be rational when raising capital as it affects its market value.

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