Financial Signaling Due to Change in Capital Structure with Refrence to Debenture Issue in Nepal

Abstract

This report attempts to examine the financial signaling due to change in capital structure with reference to debenture issue in Nepalese commercial market. As the Nepalese commercial banking sector is dominant one in the issue of debenture and its transaction.It is because of commercial banking sector is very competitive,along with banks flows good and bad signals as well.Debenture is one of the major components of capital structure and it determines the upcoming future of the bank too.Therefore capital must be sufficient to protect Bank's depositors and counter parties from the risk like credit and market risks. Adequate capital keeps the bank healthy and robust against all the contingencies and enhances the image of the bank in the capital market. Issue of debenture in capital market generally flow a positive signal to the managers, shareholders and stakeholders. The present study related on the signaling provided by the debenture issue, its impact on MPS and EPS. The studies also analyze the performance of the banks and evaluate the better policy and procedural guidelines that the bank should follow maintaining capital. The methodology adapted is secondary sources and primary method with the staff of the banks is concerned. An abstract of the thesis of Dambar Bahadur Khatri for the Degree of Master of Business Studies was presented on December 2012.