Global Journal of Commerce & Management Perspective
Open Access

Abstract

Capital Structure and Corporate Performance: A Case for Tourism and Hospitality Sector of Zimbabwe

Wilford Mawanza and Nathan Mugumisi

Coming up with an ideal or desired capital structure had just been a wish for corporations around the world. Literature had been done a lot on how capital structure can influence firm performance or value, but still not one organisation has achieved a desired optimal capital structure. The goal of this research is to investigate the relationship between capital structure and firm performance in the tourism and hospitality sector of Zimbabwe. The research was based on four listed companies in the tourism and hospitality sector over the period 2009 to 2013. Data analysis was done using Stata 10 through simple multiple regression techniques. Findings of our study showed that performance of firms is significantly affected by their capital structure and their relationship is negative in nature. Moreover there is an inverse relationship between capital structure and share price performance, market capitalisation, earnings after tax and retained earnings.