Abstract
This study aims to verify the effects of different methods of debt financing on firm value. The most common methods used by firms to finance its operations are directly issuing corporate bonds in the capital market and borrowing through financial institutions such as banks. From the accounting perspective, there is no difference between corporate bonds and bank loans. However, from the economic perspective, corporate bonds and bank loans are different in terms of their characteristics. This study conducts with the assumption that the attributes of the type of debt selected determine its impact on firm value. The results indicate that firms that use corporate bonds more frequently than bank loans have a higher value.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
