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      • KEY FUNDAMENTAL FACTORS AND THE LONG RUN STOCK PRICE CHANGES

        M Ariff,Walayet Khan People&Global Business Association 2002 Global Business and Finance Review Vol.7 No.1

        This paper reports new findings on the joint effect six theory-suggested fundamental variables have on share price changes of industrial firms. The novelty in this paper is identifying the joint effect multiple factors exert in the long run on share prices. The highly significant joint factors are dividend yields, earnings, leverage and firm size. which are variables widely acknowledged in finance theories and in practice as price relevant factors. These four factors explain three-fifth of the variation in the US share prices. However, two theory-suggested factors namely asset growth and payout ratio appears to be insignificant in our tests. This is a preliminary study employing a limited sample of homogeneous firms to establish reliable findings using a new joint-effect model.

      • CAPITAL STRUCTURE CONVERGENCE AND A DOMINANT-COUNTRY EFFECT: A CASE STUDY OF THE EUROPEAN UNION

        Dev Prasad,Yash R Puri,Walayet A Khan,H Kent Baker People&Global Business Association 2007 Global Business and Finance Review Vol.12 No.1

        This exploratory study examines the impact of the formation of the European Union (EU) at the microeconomic level. Specifically, the study investigates the impact on a firm's capital structure by investigating whether capital structures are becoming more homogeneous across 10 EU countries over time, and whether a dominant-country effect exists. The results suggest movement toward convergence in capital structures across EU economies during the period examined. This evidence, which is particularly true for industrial firms, indicates an increase in homogeneity for companies in this economic community. The evidence also indicates the presence of a dominant-country effect. Specifically, the capital structures in the smaller EU economies lend to converge on the French capital structure. These changes in capital structure have implications for investors due to changes in the value of the firm as well as policy makers due to the changed needs of the market microstructure.

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