Capital Structure Choice And Effects Essay Example Pdf

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Have you clearly indicated the discipline or sub-discipline in which your area of interest resides? One of the most important financial decisions a firm must contend with is the capital structure choice. Its effect on overall firm value was first tackled by Modigliani and Miller (1958 & 1963 cited in Arnold, 2005). Their findings which stated that due to the effects of the ‘tax shield’ debt financing will add more value to the firm has formed the bases on many research on capital structure and has thus become a very important aspect of corporate fine. It is based on the fallout from these further studies that we propose the topic area below; ‘Capital Structure Choice and Performance of Football Clubs: Evidence from the English Premier League’

2. Proposed Working Title

Yes No Have you clearly indicated the particular focus or areas of focus that you will address within your chosen topic area?

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Are you sure this is not a strategic question? (check Fisher 2007, p. 34)

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Empirical Investigation Into the Relationship Between Capital Structure Choice and Performance of Football Clubs in the English Premier League.

3. Proposed Research Aims

Yes No Have you been explicit about what is it that you are trying to find out or resolve?

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This research aims to empirically investigate the capital structure of football clubs and the effect of this debt policy on the financial performance of these clubs. Most literature available has focused on the determinants of capital structure, and has also tried to develop the ideal mix of debt and equity for firms. Whereas some considerable work has been done on the relationship between a firm’s capital structure and financial performance, these have focused on standard industries and businesses. Largely missing from the body of literature is the focus on businesses with the dynamics of professional football or professional sports industry. This clearly indicates a gap in the literature that this research aims to address. With the significant level of investment required to be successful in the industry, such research will be invaluable to future businessmen who would want to invest in the industry, academics and not least the supporters of these football clubs. Thus, the aim of this paper is to examine the effect of the financing decision (capital structure choice) on the overall financial performance of football clubs. It also aims to analyse the financial leverage of these clubs and investigate its relationship with time.

4. Research Context

Yes No Have you provided a clear indication of why this is a business and management related topic of interest?

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Have you been explicit about the organisation/ the organisational section/ region/nation, and feasibility of data collection?

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The football industry has changed significantly over the last decade.

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