The Relationship Between Ownership Structure And Firm Performance

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The value of a firm depends on the internal shareholder’s share, which is called ownership structure. Jensen and Meckling Ownership structure has two implications; i.e. structure of ownership (share percent of state, legal or institution, domestic individual holders) and ownership concentration (share percent of top five or 10 holders). Jensen and Meckling divided shareholders into internal investors which has management right and external shareholders investors without vote right. Theoretically, the more the internal shareholder’s share the higher the firm value. The researchers also defined firm value as a function of ownership structure. Because ownership structure has links with corporate governance, it can have both positive and negative effects on corporation governance (Jiang 2004). No shareholder has a concentrated shareholding or controls the board through voting power. --David Hillier We begin our exploration of the relationship between ownership structure and firm performance by first investigating the determinants of ownership concentration. The number of total shares As at 18 March 2015 (being the latest practicable date prior to publication of this document) the Company’s issued share capital amounted to £15,287,356 comprising 152,873,556 ordinary shares of 10 pence each, none of which are held in treasury. The directors have no present intention of exercising this authority which will expire at the conclusion of the AGM in 2016 or, if earlier, 1
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