Research Article
Impact of Optimal Capital Structure in QANTAS Airways Limited from 2015 - 2019
@INPROCEEDINGS{10.4108/eai.17-6-2022.2322685, author={Mengyao Yu}, title={Impact of Optimal Capital Structure in QANTAS Airways Limited from 2015 - 2019}, proceedings={Proceedings of the International Conference on Information Economy, Data Modeling and Cloud Computing, ICIDC 2022, 17-19 June 2022, Qingdao, China}, publisher={EAI}, proceedings_a={ICIDC}, year={2022}, month={10}, keywords={optimal capital structure interest tax shield financial distress costs}, doi={10.4108/eai.17-6-2022.2322685} }- Mengyao Yu
Year: 2022
Impact of Optimal Capital Structure in QANTAS Airways Limited from 2015 - 2019
ICIDC
EAI
DOI: 10.4108/eai.17-6-2022.2322685
Abstract
This paper aims to present Qantas Airways Limited (hence force Qantas) optimal capital structure and discuss further if it has operated at its optimum level by analyzing the company’s historical capital structures over the past five years and make a keen comparison with four other firms in the same industry. Findings of this historical analysis from 2015 to 2019 helps to identify the appropriate method of how Qantas finances its overall operation and how the company raises funds to support its potential growth. According to Global Industry Classification (GICS), Virgin Australia Limited (VAH), Alliance Aviation Services Limited (AQZ), Regional Express Holdings Limited (REX) and Air New Zealand (AIZ) operates in the same sector as Qantas within the same transportation industry group. Therefore, the capital structure of these four industry-representative companies and Modigliani-Miller theory, trade-off theory, and free cash flow hypothesis can be used as an important criterion for comparison and to measure the optimal structure of Qantas. Finally, this paper will determine whether Qantas Airways Limited has reached its optimal capital structure within the above-mentioned years or not.