THE IMPACT OF FIRM LEVERAGE ON STOCK RETURN IN MANUFACTURING INDUSTRY
Abstract
This paper seeks to provide evidence on the impact of firm’s leverage on its stock return. The analysis was implemented on the 30 manufacturing companies listed on Bursa Malaysia. The selected companies were estimated from the annual financial reports covering a period of five years (2011-2015). The random effects GLS regression was employed in carrying out this analysis. The result of the study reveals that only one variable which is short term debt has enough evidence and significant negatively related to stock return. However, other variables such as long-term debt, total debt to equity and firm size are found to be irrelevant with stock return.
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