Advances in Economics, Management and Political Sciences

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Proceedings of the 7th International Conference on Economic Management and Green Development

Series Vol. 40 , 10 November 2023


Open Access | Article

Research on Capital Structure and Investment Value of the Healthcare Industry

Yuanxin Li * 1
1 Beijing Institute of Technology Zhuhai

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 40, 83-90
Published 10 November 2023. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Yuanxin Li. Research on Capital Structure and Investment Value of the Healthcare Industry. AEMPS (2023) Vol. 40: 83-90. DOI: 10.54254/2754-1169/40/20231998.

Abstract

This paper makes an in-depth study of the US healthcare industry from both empirical and theoretical aspects of capital structure and investment value. By calculating the WACC (weighted average cost of capital) for three of the most representative public companies in the US healthcare industry (Johnson & Johnson, Pfizer, and UnitedHealth Group) and reviewing the literature, it is concluded that the company's business and capital flows have been affected due to the impact of the COVID-19 pandemic. At the same time, due to some differences in the main business and nature of the three companies, United Health Group found that it has the highest investment risk. Based on the analysis of the investment value and investment risk of Johnson & Johnson, Pfizer, and UnitedHealth Group, this paper provides more appropriate investment recommendations for investors with different preferences, to further understand the future development trend of the American medical industry.

Keywords

capital structure, investment value, healthcare industry

References

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3. RICHARD M. SCHEFFLER, L. M.: Soaring private equity investment in the healthcare sector: Consolidation accelerated competition undermined, and patients risk. pp. 4-7. (2021)

4. Johnson, T. D: U.S. not getting good value for its health care investment. Nation's Health, pp. Vol. 36 Issue 9, p6-7. (2006).

5. TurnerScottJason: Business risk and the trade-off theory of capital structure: Predicting the use of long-term debt in the healthcare sector. (2010).

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7. Micca, P., Health-tech investment trends: A view into the Future of Health, https://www2.deloitte.com/us/en/blog/health-care-blog/2021/health-tech-investment-trends-a-view-into-the-future-of-health.html, last accessed 2023/5/6.

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Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title
Proceedings of the 7th International Conference on Economic Management and Green Development
ISBN (Print)
978-1-83558-101-8
ISBN (Online)
978-1-83558-102-5
Published Date
10 November 2023
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/40/20231998
Copyright
© 2023 The Author(s)
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated