Hussam Musa

Department of Finance and Accounting, 

Matej Bel University, Slovakia

hussam.musa@umb.sk

ORCID 0000-0002-4492-8770

Reevaluating capital structure theories: The impact of stock yield maximization on leverage in European firms

Juraj Medzihorský

Department of Finance and Accounting, 

Matej Bel University, Slovakia

juraj.medzihorsky@umb.sk

ORCID 0000-0001-6689-2097

Peter Krištofík

Department of Finance and Accounting, 

Matej Bel University, Slovakia;

Institute of Management and Finance 

WSB Merito University in Gdansk, Poland

peter.kristofik@umb.sk

ORCID 0000-0002-7612-0418

Zdenka Musová

Department of Corporate Economics and Management, 

Matej Bel University, Slovakia

zdenka.musova@umb.sk

ORCID 0000-0002-1067-8291

Dagmar Škvareninová

Department of Language Communication in Business, 

Matej Bel University, Slovakia

dagmar.skvareninova@umb.sk

ORCID 0000-0001-5194-1423

Abstract. Several capital structure theories typically consider firm value maximization as the primary goal. In this paper, we propose a shift in this aim to stock yield maximization and investigate its implications. We address two specific issues: first, the redefined primary aim of stock yield maximization; second, the use of adjusted leverage measurement tools to explore the negative correlation between profitability and leverage, which similarly affects the relationship between stock yield and leverage. We verify the validity of capital structure theories under this new aim through an analysis of the relationship between stock yield and leverage, using both standard and adjusted measures. Our study focuses on European listed non-financial firms and reveals a negative correlation between stock yield (both capital and overall) and leverage with standard measures, contradicting existing theories. However, applying adjusted leverage measures confirms capital structure irrelevancy under the new aim, supporting the classical theory and the MM model. Notably, dividend yield positively correlates with leverage, aligning with investor expectations in more leveraged firms, as supported by several theories.

Received: November, 2024

1st Revision: November, 2025

Accepted: December, 2025

DOI: 10.14254/2071-8330.2025/18-4/7

JEL Classification: G32, B26, G11, C20

Keywords: stock price, leverage, capital structure, firm value, the main aim of a firm