EFFECT OF LBO ON THE CAPITAL STRUCTURE OF SELECT COMPANIES

SUMAN PATRA

EFFECT OF LBO ON THE CAPITAL STRUCTURE OF SELECT COMPANIES

May 2020

Vol-6, Issue-3

Paper ID: 11993

ISSN: 2395-4396

Downloads: 0

Abstract & Details

Research Area

MANAGEMENT AND COMMERCE

Keywords

LBO Capital Structure Value Creation Private Equity

Abstract

This study examines the change in capital structure of the sample companies which have undergone Leveraged Buyout (LBO) during the period from 2005-06 to 2015-16. Event study approach has been adopted to measure the change in capital structure of the sample companies. Two variables viz, (1) Debt to Total Assets (DTA) ratio and (2) Debt as % of LBO year debt ratio have been computed for measuring the change in capital structure of the sample companies. It is found that LBO leads to change in capital structure as most of the circumstances two variables have been increased following the three years of LBO. Paired sample t test has been adopted on the variables to determine the statistically significant relationship between LBO and change in capital structure. Finally it is also found that LBO leads to statistically significant enhancement of leverage on the sample companies in order to take the advantage of tax shield even though the LBO firms have positive excess cash flows following buyout.

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Author Information

#	Name	Institute / Affiliation
1	SUMAN PATRA	MAYAL K.C.ROY INSTITUTION

How to Cite

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APA Style

PATRA, SUMAN (2020). EFFECT OF LBO ON THE CAPITAL STRUCTURE OF SELECT COMPANIES. International Journal of Advance Research and Innovative Ideas In Education, 6(3), 404-411.

MLA Style

PATRA, SUMAN. "EFFECT OF LBO ON THE CAPITAL STRUCTURE OF SELECT COMPANIES." International Journal of Advance Research and Innovative Ideas In Education, vol. 6, no. 3, 2020, pp. 404-411.

IEEE Style

SUMAN PATRA, "EFFECT OF LBO ON THE CAPITAL STRUCTURE OF SELECT COMPANIES," International Journal of Advance Research and Innovative Ideas In Education, vol. 6, no. 3, pp. 404-411, 2020.

Vancouver Style

PATRA SUMAN. EFFECT OF LBO ON THE CAPITAL STRUCTURE OF SELECT COMPANIES. International Journal of Advance Research and Innovative Ideas In Education. 2020;6(3):404-411.

Harvard Style

PATRA, SUMAN (2020) 'EFFECT OF LBO ON THE CAPITAL STRUCTURE OF SELECT COMPANIES', International Journal of Advance Research and Innovative Ideas In Education, 6(3), pp. 404-411.

Chicago Style

PATRA, SUMAN. "EFFECT OF LBO ON THE CAPITAL STRUCTURE OF SELECT COMPANIES." International Journal of Advance Research and Innovative Ideas In Education 6, no. 3 (2020): 404-411.

Turabian Style

PATRA, SUMAN. "EFFECT OF LBO ON THE CAPITAL STRUCTURE OF SELECT COMPANIES." International Journal of Advance Research and Innovative Ideas In Education 6, no. 3 (2020): 404-411.