Capital Structure and Dividend Policy

Capital Structure and Dividend Policy focuses on two primefinancing decisions firms face: the payout and the capitalstructure decisions. Theory and empirical evidence generally acceptthat asymmetric information and agency conflicts have a profoundinfluence on these decisions, particularly in emerging markets,where these problems tend to be acute. The book is organized into 4standalone empirical papers that investigate financing decisions offirms in emerging markets, using a range of econometric techniques.Following an introductory, chapter 2 reviews existing literature onthe dividend controversy. Chapters 3-6 comprise the empiricalchapters: chapter 3 tests an agency model of dividends on Indianfirms while chapter 4 studies the determinants of capital structureof Mauritian firms. Chapters 5&6 incorporate into the dividendand capital structure decisions respectively, an importantcorporate governance facet: business groups. The main insights fromthe study are summarised in chapter 7. The empirical orientation ofthe book and the application of a range of econometric procedures,make it particularly suited for Masters and PhD students in thefield of corporate finance.