Journal Name:
British Journal of Economics, Finance and Management Sciences
Volume:
3
Issue:
2012
Pages From:
92
To:
101
Date:
Sunday, January 1, 2012
Keywords:
Return on Assets, Return on Equity, Total Deposit to Assets, Loans to Total Deposits, Loans to Total Assets, Tobin's Q
Abstract:
This study aims at finding the relationship between the market efficiency and capital structure of
Palestinian financial institutions. The study establishes a model to measure the effect of capital
structure on the bank efficiency measured by ROE, ROA, Total deposit to assets ,total loans to assets
and total loans to deposits were used to measure capital structure. It is found that leverage has a
negative effect on bank profits, an increase in each ROA and Total Deposit to Assets increase bank
efficiency. We also tested the effect of the above variables on bank market value measured by Tobin's
Q. It was also found that Leverage has a negative effect on market value of the bank, a positive and
strong relationship between market value and ROA and bank deposits to total deposits.