An examination of restaurant firm financing and the cost of borrowing

Michael C. Dalbor, Seoki Lee

Research output: Contribution to journalArticlepeer-review

Abstract

The use of debt is prevalent in the restaurant industry. While there have been numerous studies on restaurant capital structure, this study examines the relationship between firm performance and effective interest rate on debt used by restaurant firms. This study uses a sample of 56 publicly traded U.S. restaurant firms for the years 2012–2014. We examine the relationship between effective interest rates and firm performance as measured by approximate Tobin’s Q, return on assets, and return on equity. We find a significant and positive relationship between effective interest rates and return on equity.

Original languageEnglish (US)
Pages (from-to)163-176
Number of pages14
JournalJournal of Foodservice Business Research
Volume20
Issue number2
DOIs
StatePublished - Mar 15 2017

All Science Journal Classification (ASJC) codes

  • Food Science

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