This study endeavors to investigate the impact of firm specific factors on capital structure decision for a sample of 44-firm listed on Dhaka Stock Exchange (DSE) during the period of 2004-2011. To achieve the objectives, this study tests a null hypothesis that none of the firm's specific factors such as, liquidity, market to book, collateral, dividend payment, profitability, size and industry classification has significant impact on leverage using estimate of fixed effect model under Ordinary Least Square (OLS) regression. Checking multicollinearity and estimating regression analysis through Pearson correlation model respectively this study found that profitability, collateral and liquidity have significant and negative impact on leverage. Positive and significant impact of market to book value ratio on leverage has been found in this study. On the other hand, dividend payment and size were not found as significant explanatory variables of leverage. Results also expose that total debts to total assets ratios are significantly different across Bangladeshi industries.
Efficient Market Hypothesis (EMH) hasattracted a considerable number of studies in empirical finance, particularly in determining the market efficiency of an emerging financial market that is Dhaka Stock Exchange (DSE). Conflicting and inconclusive outcomes have been generated by various existing studies in EMH. In addition, efficiency tests in the emerging financial markets are rarely definitive in reaching a conclusion about the issue. This paper recommend a paradigm of non-parametric tests of market efficiency for an emerging stock market, that is DSE, consisting of non-parametric test which is autocorrelation function tests (ACF), to establish a more definitive conclusion about EMH in emerging financial markets. The result of this research using Dhaka Stock Exchange General Index (DGEN) demonstrates that a positive autocorrelation on Dhaka Stock Exchange returns exists particularly in the period of 2001-2013 and DSE doesn't hold weak form of efficiency and not following the Random walk model. The inefficiency of the Dhaka Stock Exchange follows on from the violation of the necessary conditions for an efficient market with a developed financial system and also implies financial markets and institutional imperfections.
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