How Does the Selection of Hedging Instruments Affect Company Financial Measures? Evidence from UK Listed Firms

George Emmanuel Iatridis, Polychronis Euangelopoulos

Abstract


The study investigates the financial attributes of firms that utilise different hedging instruments. The findings show that firms that use interest rate swaps and futures and forwards tend to display higher size, growth, profitability, dividend payout and leverage measures as opposed to firms that do not use hedging. By distinguishing between two major types of hedging instruments, the findings assist users in understanding the economic consequences that stem from the selection of different hedging tools and in making unbiased predictions about firms’ future financial prospects and position.


Full Text: PDF DOI: 10.5539/ijef.v4n5p51

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This work is licensed under a Creative Commons Attribution 3.0 License.

International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

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