Study of Impact of the Capital Structure in Improving the Market Value of the Banks and Increasing their Profitability An Analytical Study of the Iraqi Banks Listed on Iraq Stock Exchange

摘要

The study is an attempt to show the relationship between capital structure ratios and market capitalization (market cap). The researcher?s study sample included 17 banking sectors, listed on the Iraq Stock Exchange. The researchers relied on a number of quotations to measure study variables. To achieve study objectives, they relied on the then current stock market statements published between 2006 and 2014 and the Simple Linear Regression. After analyzing the data and the process of choosing hypotheses, the researchers reached the following findings: there is no relationship between the independent variable of the structure of capital and market value which is indeed a weak value, almost non-existent. Also, the study shows that, the relationship between capital structure and profitability were negative and weak, stressing the weakness of the Iraqi banking sector and lack of its dependence on precise strategies regarding the study variables and low efficiency among departments of banks in terms of knowledge of the financial indexes. The banks should also reduce the cost of capital used to finance projects to the lowest possible proportion in order to reach an appropriate capita model.