2024-03-28T14:21:31Zhttp://buleria.unileon.es/oai/requestoai:buleria.unileon.es:10612/146302022-06-15T12:56:58Zcom_10612_17col_10612_18
BULERIA. Repositorio Institucional de la Universidad de León
author
Fonseka, M. M.
author
García Ramos, Constantino
author
Tian, Gao-liang
other
Organizacion de Empresa
2022-04-25T07:31:24Z
2022-04-25T07:31:24Z
0892-7626
https://clutejournals.com/index.php/JABR/article/view/6963
http://hdl.handle.net/10612/14630
10.19030/jabr.v28i3.6963
2157-8834
The objectives of this paper are to analyze whether there is a significant difference among widely used Higgins model and Van Horne model and whether these two competing sustainable growth rate models (SGR) estimate divergences in ways that are systematically related to variations in common financial characteristics. We find that Higgins SGR when used as continuous and dichotomous variables is more affected by variations in financial characteristics than Van Horne’s model. This study confirms that Higgins and Van Horne’s models are qualitatively and approximately the same in relation to most common financial characteristics of a firm. However, if the Higgins model is used to compute SGR, it would give higher SGR for more profitable firms than Van Horne’s. A firm with higher leverage is given higher SGR in Van Horne’s than Higgins. Variations of liquidity, debt maturity and financial distress are trivial in economic sense. Finally, we find that the both Higgins and Van Horne’s models result in approximately same (less than 4%) loss in sample size and not induce more sample-selection bias. We suggest that Higgins and Van Horne’s models are equally preferable from both the managers’ and researchers’ point of view.
Economía
Finanzas
The Most Appropriate Sustainable Growth Rate Model for Managers and Researchers
info:eu-repo/semantics/article
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URL
https://buleria.unileon.es/bitstream/10612/14630/1/most-appropriate_sustainable_growth.pdf
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most-appropriate_sustainable_growth.pdf
URL
https://buleria.unileon.es/bitstream/10612/14630/3/most-appropriate_sustainable_growth.pdf.txt
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MD5
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most-appropriate_sustainable_growth.pdf.txt