Do Growth Opportunities Influence the Relationship of Capital Structure, Dividend Policy and Ownership Structure with Firm Value: Empirical Evidence of KSE?

Abstract

The purpose of the study is to explore empirically the association among leverage, dividend payout ownership structure and firm value and influence of growth opportunities on this relationship. To obtain the correct empirical results this study applied the correlation analysis technique, ordinary least square (OLS) regression analysis on 148 non-financial companies listed on Karachi Stock Exchange (KSE), for the period of Five years (2011-2015). Using t-test and panel data regressions. The study found significant positive relationship between leverage, and firm value, and ownership concentration and firm value while insignificant association between dividend payout and firm value. The study further found that the interaction term of leverage and growth opportunities is insignificant, the interactive term of dividend payout and growth opportunities is also insignificant, and the interaction of ownership concentration and growth opportunities is also insignificant. So in the presence of growth opportunities the relationship of leverage, dividend payout and ownership structure with firm value does not affect. So growth opportunities do not play a moderating role.