The Impact of Debt on Firm Value: An Analysis of the UK Market

Authors

  • Tokhirjonov Jamshid Giyosjon Ugli Tashkent State University of Economics-Uzbekistan
  • R. Nelly Nur Apandi Universitas Pendidikan Indonesia
  • Denny Andriana Universitas Pendidikan Indonesia
  • Alfira Sofia Universitas Pendidikan Indonesia

DOI:

https://doi.org/10.30993/jicab.v3i1.506

Keywords:

Firm Value, Debt, Capital Structure, UK Stock Market, Modigliani-Miller Theorem, Financial Strategy

Abstract

This study examines the impact of debt on firm value within the UK stock market, focusing on the unique economic, regulatory, and market conditions of the region. Using a descriptive quantitative analysis and regression modeling, the research investigates the relationship between debt levels and firm valuation for publicly listed UK firms in 2023. The findings reveal that debt levels do not significantly influence firm value, aligning with the Modigliani-Miller Theorem, which posits that capital structure has a limited effect on firm valuation in perfect markets. The results suggest that other factors, such as profitability, firm size, and market conditions, play more substantial roles in shaping firm value. This research contributes to the understanding of debt's role in financial strategy and provides insights for investors and financial managers in assessing risk and making informed decisions.

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Published

2025-03-12

Issue

Vol. 3 No. 1 (2025): JICAB

Section

Articles

License

Copyright (c) 2025 The Impact of Debt on Firm Value: An Analysis of the UK Market © 2025 by Tokhirjonov Jamshid Giyosjon Ugli, R. Nelly Nur Apandi, Denny Andriana, Alfira Sofia is licensed under CC BY-NC 4.0

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Journal of Islamic Contemporary Accounting and Business © 2023 by Tazkia Islamic University College is licensed under CC BY-NC 4.0 

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