2020
DOI: 10.9734/ajeba/2020/v15i230210
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Abstract: This study examined the impact of the debt ratio, total assets, and earnings growth rate on banks’ WACC. This study employed bank scope data of twenty-eight commercial banks during the single period of 2018. Altogether, there were 28 observations were made in the study. The ordinary least squares model was used to analyze the data. The results indicated that two predictor variables debt ratio and total assets significantly affected the bank’s WACC. But the predictor variable earnings growth rate did not signif… Show more

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Cited by 4 publications
(4 citation statements)
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“…Companies that maximize debt share can decrease the WACC level due to the tax shield effect [117]. The tax shield affects the choice of financing sources [47], and this approach is adopted in WACC valuation methods [118].…”
Section: Discussionmentioning
confidence: 99%
“…Companies that maximize debt share can decrease the WACC level due to the tax shield effect [117]. The tax shield affects the choice of financing sources [47], and this approach is adopted in WACC valuation methods [118].…”
Section: Discussionmentioning
confidence: 99%
“…The outcomes of the study were supported by the fact that a larger volume of investment in modern technology enhances the delivery of better service quality, alleviates the operating cost, and able to compete more effectively by lowering the interest rate. The banks also benefited from economies of scale and economies of scope (Budhathoki & Rai, 2020). The regression coefficient of geographic expansion (c'3 = -.326, p. < .01) indicated that a higher number of bank branches resulted in lower ROA to the banks.…”
Section: 980mentioning
confidence: 99%
“…NPV method has the most extensive and difficult application scope among the various enterprise valuation methods currently used, and has the highest requirements for financial and business sensitivity [8]. Marchioni and Magni [9] also proposed that the reliability of a valuation model depends on its compatibility with NPV.…”
Section: Introduction Of the Traditional Npvmentioning
confidence: 99%