Impact of External Finance on Value of the Firm

This paper examines the relationship between the external finance and the firm’s value, by using the quarterly data of the Tesla from 2010 to 2024.The analysis was done through Multiple Linear Regression, which assesses how debt equity ratio, return on assets , profit margin and current ratio influence the Tesla’s share price. The result shows that ROA positively affects share price , which indicates the operational efficiency and profitability. Debt equity ratio has negative effect it indicates the dangers of high leverage. The model has 46% explanation for variance in share price. Debt to equity ratio suggests that as leverage increases the value of the firm tend to decrease . This may be because of the risk of default of principal payment and interest vice versa.