Debt-heavy companies in industrial sector see higher value, study finds.
The study looked at how a company's mix of debt and equity affects its overall value in the industrial product sector in Malaysia. By analyzing data from 1998 to 2007, researchers found that total debt and debt-to-asset ratio significantly impact a firm's value, while pre-tax profit margin does not. This means that the amount of debt a company has compared to its assets can affect how valuable the company is.