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Abstract

The term 'leverage' is used to utilize the fixed cost or funds to increase the returns to the owners of the firm. The study is an attempt to analyze the determinants of corporate leverage in IT industry in India. In order to test the hypotheses and to address the objectives of the study, the present study has chosen 28 sample firms from IT industry in India, which are listed in National Stock Exchange. The study used correlation and regression analysis to find the relationship and the impact of corporate leverage on profitability. The study proves that there is a significant impact of operating Leverage and Financial Leverage on Return on Net worth. Hence, based on the results, the 1 2study rejects Ho and Ho , revealing that the Operating Leverage and Financial Leverage have impact, of course the Operating Leverage negatively while the Financial Leverage positively, on Return on Net worth of IT Industry as a whole in India. However, the impact o Combined Leverage on Return on Net worth is not significant due to negative impact of Operating Leverage on Return on Net worth.

Details

Business indexing term
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Title
The Impact of Corporate Leverage on Profitability: Evidence from IT Industry in India
Publication title
Volume
8
Issue
4
Publication year
2015
Publication date
Oct 2015
Publisher
Pacific Academy of Higher Education and Research
Place of publication
Udaipur
Country of publication
India
ISSN
0974438X
Source type
Scholarly Journal
Language of publication
English
Document type
Journal Article
ProQuest document ID
3109504991
Document URL
https://www.proquest.com/scholarly-journals/impact-corporate-leverage-on-profitability/docview/3109504991/se-2?accountid=208611
Copyright
Copyright Pacific Academy of Higher Education and Research 2015
Last updated
2024-09-26
Database
ProQuest One Academic