Examining the Relationship Between Financial Leverage and Shareholder Payoffs: Insights from the Pharmaceutical Sector in India

Abstract

This paper empirically examined the effect of financial leverage on payoffs to shareholders a study of listed Pharmaceutical firms in India Using annual panel data for a period of 13 years ranges from 2007-08 to 2019-20 with the application of econometric techniques The empirical results show that Long Term Debt to Total Assets LTD TA have positive relationship while Total Debt to Total Assets TD TA has negative relation with Return on Assets ROE Thereby evidenced that financial leverage has significant effect on firm performance specifically in terms of payoffs to shareholders particularly during Normal Bullish phase of Economy when measured through EPS ROE in sample Pharmaceutical Companies in India