The implications of financial leverage on shareholder's return and market capitalization: The case of the ASEAN 5 telecommunications industry

Date of Publication


Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Commerce Major in Management of Financial Institutions

Subject Categories

Finance and Financial Management


Ramon V. Del Rosario College of Business


Financial Management Department

Thesis Adviser

Catherine Kalayaan S. Almonte

Defense Panel Chair

Vivian Eleazar

Defense Panel Member

Denmark Alarcon
Michael Manalang


Due to the invaluable role of communications to human progress, the telecommunications industry has grown to become one of the staples of every modern society. In the ASEAN region, development objectives feature telecommunications-related agenda as an effort to further the regional growth of the industry. The telecommunications industry is often perceived to be one of the most lucrative and attractive platforms for investment, thus making the assessment of its financial tools and performance indispensable. As such, this study examined the impact of financial leverage to the shareholder's return and market capitalization in the ASEAN 5 telecommunications industry, using panel data from 14 sample companies through the years 2004-2013. The use of the random effects model yielded results that found a long-run significant negative relationship between financial leverage and the said indicators. However, while a negative behavior is reflected in statistics, financial leverage remains to be beneficial to firms at managed levels. Meanwhile, other variables such as firm size, age, and liquidity have varying impacts. Evidences from actual industry practice obtained through company interviews also provided further support to the conclusions of this research.

Abstract Format






Accession Number


Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

108 leaves : illustrations


Telecommunication--Southeast Asia

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