Financial Leverage in Corporate Finance
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Abstract
Corporate finance play a role in determining the capital structure of the firms, this study has been examined the relationship between corporate finance and the use of debt financing. The study shown that funds holdings have a negative and significant impact on leverage, suggesting that financial leverage degree decreased with the increased monitoring power of funds and institutional stockholdings. In this study, a number of explanations by viewing that entrenched managers may obtain a better access to debt market and then they can finance with extra debt this possibly is consider as an outcome of conservative investments policy they used. Our findings could be a helpful and practical for not only investors and financial managers, it could be useful also for financial consultants.