<p>Background: A company’s choice of capital structure is influenced by the access to internal and external capital but also by the opportunities and threats that the management perceives in the environment and the management’s attitude towards risk. How an individual perceives and interpret the environment depends on the cognitive structures, which are shaped by personality, background and earlier experiences. Accordingly cognitive structures can be expected to influence the choice of capital structure. </p><p>Purpose: Out of a cognitive perspective we intend to study the relationship between the way a company views it’s environment and what capital structure it chooses to have, in order to contribute to an increased understanding about what lies behind a company’s capital structure policy. </p><p>Delimitations: Debt policy refers to the choice of capital structure. Cognition is briefly presented as a phenomena and in relation to risk judgement in decision processes. </p><p>Realization: Our empirical studies are based on information from the annual reports of H&M, JC and Lindex from the period of 1989-2000. </p><p>Results: The studied companies have a very similar view on the environment and their capital structures are relatively similar since all of them have a high share of equity. Consequently the choice of capital structure can be said to be influenced by the company’s view on the environment even though this is not the only influencing factor.</p>

本研究以台灣企業為研究對象，探討公司融資決策與市場時機之關係。以樣本研究期間內每月份辦理初次公開發行（IPO）家數相對多寡為衡量股市冷熱性之指標，藉由觀察於冷、熱市辦理IPO公司的融資決策差異來分析國內企業是否存在市場擇時行為以及其對資本結構的長短期影響。 實證結果顯示，熱市IPO公司於IPO當年之權益融資幅度明顯多於冷市IPO公司，使其負債比率顯著低於冷市IPO公司，然自IPO後二年起，擇時效果便逐年遞減，顯示擇時行為對資本結構的影響相當短暫，由於不論冷、熱市IPO公司，於IPO後均仍傾向依國內企業偏好之融資順位即先權益後舉債之方式籌資，且IPO後負債比率有逐年回升並趨近於IPO前水平之趨勢，顯示長期而言，國內公司資本結構相當穩定，因此推測國內企業資本結構之決定方式可能為動態抵換理論與融資順位理論之結合，即公司會在可接受之負債比率波動範圍內依照偏好之融資順位進行籌資。由於市場擇時並非調整資本結構時之主要考量，故其對資本結構的影響也相對有限，因此隨時間經過，之前的擇時行為便無法解釋公司後來資本結構之變動。 之前相關實證研究均採用市值對帳面價值比為擇時行為代理變數，本研究於比較不同方法之實證結果後發現，在台灣，市值對帳面價值比除了可作為衡量股市錯價之指標外亦可衡量公司未來成長機會，故若單使用市值對帳面價值比為代理變數將使得實證結果對於市場擇時的解釋力較為薄弱。 / This paper examines the capital structure implications of market timing. I use initial public offering as a single timing event of financing. Market timers would be those firms that go public in hot issue markets. I find that hot-market IPO firms issue more equity and hence their debt ratios decline more than cold-market ones at the end of IPO year. However, the timing effect diminishes with time and in two years after IPO, there is no significant difference between hot and cold-market firms’ debt ratios anymore. After the initial public offering, both firms’ tend to raise capital needs based on their preference financing order, which means retained earnings first, then equity issuance and finally raising debts in Taiwan. In addition, the debt ratios seem to steadily approach to their pre-IPO levels. These all might reveal that, the dynamic trade-off theory and pecking order theory would be better than the market timing theory to explain firms’ capital structures in Taiwan. Some related studies followed Baker and Wurgler（2002）’s approach, using market to book ratio as firms’ market timing proxy. I compare the results of different proxies and find that in Taiwan, market to book ratio could not only be a timing proxy but referring to a firm’s growth opportunity as well. Hence, it should be avoided using market to book ratio as a single proxy of firms’ market timing behavior when studying firms’ capital structures in Taiwan.

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We have examined the capital structure of the Swedish dairy farm industry and the driving forces behind this capital structure. This industry has undergone some major changes during modern time. These changes constitutes mainly of the number of farms and technological development. This, in combination with reported low profitability in the industry, has sparked a high media coverage about the survivability of the agricultural industry due to its important social function. The survivability of a business can be seen in its capital structure since that contains long term debt that can force a firm to become bankrupt and also the equity that contain retained earnings that can help a company weathering periods of low profitability.   Research question: How can a change in debt level for firms in the Swedish dairy farm industry be explained by financial investment theory and financial variables?   We formed three objectives in order to answer the research question. The first one was to examine how financial investment theory can explain the change in debt level. The second objective was to analyze relevant financial variables to find additional indicators of influence from investment theory as well as compare our results to previous research. The final objective was to analyze financial variables to substantiate our findings and find further explanations to the capital structure of the industry.   The theories used in order to explain the capital structure are the Pecking order theory and the Static trade-off theory. Both theories are established theories in capital structure research. The Pecking order theory states that different capital financing option follow a strict hierarchy with internal capital as the primary choice, debt financing as secondary and the equity financing option as the least preferable option. The Static trade-off theory states that there is an optimal debt level that companies strive towards. This optimal level depends on the interest tax shield and bankruptcy costs. We performed a quantitative study with a deductive approach to perform this study. The sample comprised of annual financial information from 100 Swedish dairy farms during the period 2000-2013. Criteria was formed in order to sample full-time limited liability companies.   The results show that the Pecking order theory was the most significant determinant for the change in long term debt. The Static tradeoff model showed some incompatibility with our population, reducing its reliability.  The indicator variables size, asset structure and growth was found to be positively related to the debt levels, while the profitability was negatively related to all debt variables. The risk of the firm was only significantly negative for long term debt and leverage ratio.   The Pecking order theory showed to be predominant in the Swedish dairy farm industry. This is substantiated by the indicator variables taken together and by the descriptive statistics. We also found that on average, the industry is suffering from low profitability and struggled to make profitable investments although the profitability differs a lot within the sample.

Bakgrund: Oberoende av konjunktur måste ett företag finansiera sin verksamhet med kapital. Kapitalstruktur är ett omdebatterat forskningsområde där det inte råder någon generell gångbar teori som är applicerbar för majoriteten av företag. Detta tillsammans med att kapitalstruktur i konjunkturvändningar är ett relativt outforskat område möjliggör ett intressant kunskapsbidrag. Att företag inom samma bransch visat på större likheter i kapitalstruktur aktualiserar en avgränsning till en specifik sektor. Hur påverkades Sveriges största exportsektor, industriföretagen, med deras relativt höga skuldsättning av den större konjunkturnedgången som rådde år 2006–2009? Syfte: Studien syftar till att analysera hanteringen av, samt vad som påverkade kapitalstrukturen utifrån skuldsättning i de svenska industriföretagen för konjunkturnedgången under åren 2006–2009. Genomförande: I syfte att analysera skuldsättning utifrån konjunkturnedgången användes en kvantitativ strategi med finansiella nyckeltal och värderingsmultiplar från samtliga industriföretag som förklaringsvariabler. I syfte att göra studien mer verklighetsförankrad genomfördes intervjuer med åtta bolag om hanteringen och arbetet med kapitalstrukturen över tiden. Tidigare forskning inom kapitalstruktur, tillsammans med studiens empiri, har legat till grund för analys och jämförelse med konjunkturnedgången år 2006–2009. Resultat: De flesta sambanden vilka påverkade skuldsättningen under åren 2006–2009 gäller oavsett konjunkturläge. Dock råder större inverkan av konjunkturnedgången vid analys av förklaringar till sambanden där lönsamhet, tillväxt och risk är bidragande orsaker. Industriföretagen gör ingen direkt anpassning av strukturen vid en konjunkturvändning då de anses kategoriseras som ”överlevare” utifrån verksamhet och flexibilitet i kapitalstruktursammansättning. / Background: Regardless of the economy, a company must finance its operations with capital. Capital structure is a controversial area of research without any general applicable theory for the majority of companies. This, together with the relatively unexplored area of capital structure in economic turnarounds enables an interesting contribution to knowledge. The fact that companies within the same industry has proven greater similarities in capital structure raises a delimitation into a specific sector. How was Sweden’s largest export sector, industrial companies, affected by the major economic downturn that prevailed during the years 2006–2009, considering their relatively high leverage ratio? Purpose: The aim is to analyse the management of, and what affected the indebtedness in the Swedish industrial companies during the economic downturn the years 2006– 2009. Completion: In order to analyse the indebtedness during an economic downturn the study used a quantitative approach based on financial ratios and valuation multiples as explanatory variables. Interviews were conducted in order to make the study more reality-based regarding management of capital structure over time. Previous research in capital structure, together with the empirical results, has been the basis for analysis and comparisons to the economic downturn during 2006–2009. Results: Most correlations, which affected the indebtedness during 2006–2009, prevails regardless of the economic climate. However, there is a greater impact by the economic downturn when analysing the explanations of the correlations whereby profitability, growth and risk are seen as contributing factors. Furthermore, industrial companies make no direct adaption in structure at economic turnarounds since they are considered “survivors” in their strategy based on their business and flexibility in the composition of capital structure.

This dissertation addresses issues in corporate finance. Part I examines the litigation environment of a firm and its impact on financial policy. Chapter 1 discusses prior research, including theory and empirical results, related to firm performance, financial policy, and litigation. It provides the background to support the empirical analyses of Chapters 2 and 3. Chapter 2 examines the wealth effects of litigation events on the firms involved, as well as on their industry peers. I find that litigation events have a strong negative effect on both the firms sued, as well as their competitors. Chapter 3 examines whether managers use financial policy strategically when facing an increased risk of litigation claims. I find that greater litigation exposure leads firms to choose higher leverage. I show that this leverage increase is brought on by an active decision to repurchase shares. These repurchases appear to be financed with a combination of excess cash and short term debt as they coincide with a significant decrease in cash holdings and an increase in short term liabilities. These firms also increase their use of operating leases, which, due to their priority in bankruptcy, have similar characteristics as secured debt. Finally, the effects seem to be stronger for firms with a higher probability of bankruptcy. Part II asks whether there is a disposition effect in corporate investment decisions. Chapter 4 provides a summary of the existing literature related to the disposition effect and discusses both theoretical and empirical findings. In Chapter 5, I utilize the unique nature of Real Estate Investment Trusts (REITs) to test for the presence of the disposition effect in corporate investments. The results show strong statistical evidence that REIT managers tend to sell winners and hold losers, where winners and losers are defined using changes in properties’ prices since they were acquired. In addition, I find evidence that this behavior is consistent with the disposition effect. REIT managers are significantly less likely to sell properties that have a loss relative to a reference point based on inflation or historical average returns, controlling for the properties’ recent returns. / text

Η ερευνά μας είναι οργανωμένη γύρο από ένα απλό πλαίσιο που περιέχει τέσσερα βασικά συστατικά: Το πρώτο συστατικό διερευνά τις επικρατέστερες θεωρίες της κεφαλαιακής διάρθρωσης. Το δεύτερο είναι ότι σε οποιαδήποτε δεδομένη στιγμή τα οφέλη και τα κόστη που υπάρχουν συνδέονται με διάφορες επιλογές χρηματοδότηση, καθώς και οι συμβιβασμοί αυτών των οφελών και του κόστους οδηγούν της επιχειρήσεις σε ξεκάθαρους στόχους αναλογίας χρέους. Το τρίτο έχει να κάνει με την ύπαρξη των διαταραχών που αναγκάζουν τις επιχειρήσεις να αποκλίνουν, έστω και προσωρινά, από τους στόχους τους. Τέλος, το τέταρτο διερευνά την παρουσία των παραγόντων που εμποδίζουν την επιχείρηση να προβεί άμεσα σε διαρθρωτικές αλλαγές του κεφαλαίου της, αντισταθμίζοντας την επίδραση των διαταραχών που την μετακινεί μακριά από τους στόχους της. Ξεκινάμε την ερευνά μας αναλύοντας το πρώτο συστατικό, τις επικρατέστερες θεωρίες της κεφαλαιακής διάρθρωσης, συνεχίζουμε με μια ομάδα από μελέτες που ασχολούνται και αναλύουν το δεύτερο συστατικό, το κόστος και τα οφέλη μιας επιχείρησης από την κεφαλαιακή διάρθρωση. Αυτά μπορεί να περιλαμβάνουν το φορολογικό όφελος του χρέους, τα επαχθή έξοδα της εκκαθάρισης ή αναδιοργάνωσης, την οικονομική δυσπραγία, και ούτω καθεξής. Η μελέτες που παραθέτουμε είναι κατά κύριο λόγο αληθινά αντιπροσωπευτικά δείγματα, και απευθύνονται στο μέγεθος των χαρακτηριστικών της επιχείρησης. Μια παραδοχή αυτών των σύγχρονων μελετών είναι ότι οι παρατηρούμενες αναλογίες χρέους είναι σχετικά κοντά στους πραγματικούς στόχους της επιχείρησης. Το επίκεντρο της τρίτης ομάδας των μελετών μας κυμαίνεται γύρω από τις διαταραχές που μπορεί να προκαλέσουν σε μια επιχείρηση υπέρ-ή-υπό μόχλευση, σε σχέση με τον στόχο της. Οι διαταραχές αυτές μπορεί να περιλαμβάνουν τις ευκαιρίες του ¨χρονοδιαγράμματος της αγοράς¨ (περιόδους όπου η χρηματοδότηση των κεφαλαίων είναι προσωρινά φθηνή), περιόδους υψηλής κερδοφορίας που επιτρέπουν στην επιχείρηση να συσσωρεύει παθητικά τα αποθεματικά της μετρητά, ή περιόδους ταχείας βελτίωσης των προοπτικών της επιχείρησης, που αλλάζουν ουσιαστικά την αξία των ιδίων κεφαλαίων της. Συζητάμε κάθε μία από αυτές τις εναλλακτικές λύσεις με λεπτομέρεια, εξερευνώντας επιπτώσεις του αντιπροσωπευτικού δείγματος και των χρονοσειρών τέτοιων διαταραχών. Στη συνέχεια, θα προχωρήσουμε στο τελικό στάδιο - τον εντοπισμό των παραγόντων που μπορεί να αποτρέψουν τις επιχειρήσεις από τη συνεχή διατήρηση των δεικτών χρέους που ταιριάζουν στους στόχους τους. Για την αντιμετώπιση αυτού του ζητήματος θα ερευνήσουμε τα εμπειρικά αποδεικτικά στοιχεία σχετικά με τις αλλαγές της κεφαλαιακής διάρθρωσης. Στη συνέχεια θα στραφούμε στα μοντέλα ¨ταχύτητας προσαρμογής¨ που εξετάζουν πόσο γρήγορα οι επιχειρήσεις θα στραφούν προς τους στόχους τους. Τέλος, θα ασχοληθούμε με την ¨ιεραρχική συμπεριφορά¨ η οποία αποτελεί το αντικείμενο της επόμενης ομάδας μελετών μας. Σύμφωνα με την ιεραρχία που περιγράφεται από τους Myers (1984) και Mailuf (1984), λόγω των ασυμμετριών στην πληροφόρηση, η χρηματοδότηση των επενδύσεων γίνεται πρώτα από τα αδιανέμητα κέρδη που ακολουθούνται από τα έσοδα του χρέους. Η ανασκόπηση μας οργανώνεται ως εξής: Στο πρώτο, κεφάλαιο αναλύουμε το πρόβλημα που αντιμετωπίζουν οι ελληνικές επιχειρήσεις για την εύρεση επενδυτικών πηγών, καθώς και την έννοια της άριστης κεφαλαιακής διάρθρωσης. Στη συνέχεια στο δεύτερο κεφάλαιο, αναφέρουμε τις επικρατέστερες θεωρίες της κεφαλαιακής διάρθρωσης, καθώς και παραδείγματα και προτάσεις. Στο τρίτο κεφάλαιο, θα αρχίσουμε την επισκόπηση μας με τους καθοριστικούς παράγοντες της κεφαλαιακής διάρθρωσης, εστιάζοντας κυρίως στο κόστος και τα οφέλη συμπεριλαμβανομένων των διευθυντικών στελεχών της επιχείρησης καθώς και των προμηθευτών του κεφαλαίου. Στο τέταρτο κεφάλαιο, θα διερευνήσουμε τους παράγοντες που αποτρέπουν τις επιχειρήσεις μακριά από τους στόχους μόχλευσης της. Τέλος στο πέμπτο κεφάλαιο, θα αναλύσουμε τους λόγους για τους οποίους οι επιχειρήσεις δεν θα ανακαλέσουν άμεσα την επίδραση των διαταραχών της μόχλευσης, επιτρέποντας προφανώς αποκλίσεις από τους στόχους τους. / The present thesis aims at analysing and identifying the factors influencing business leverage and the determination of the variation ratios of enterprises by the debt targets.

Using a panel data analysis of a sample of 80 listed non-financial Jordanian firms during the period from 2000 to 2011, we investigated the corporate cash-holding decision. The firm’s decision to hold cash has come to the fore in last two or three years as a result of the recent global financial crisis, and the impact that this has had on the firms’ ability to raise funds from external sources. There is evidence in the US, for example, that firms have increased their holdings of cash as a result of increasing constraints from external sources. This current study therefore examines this issue from the point of view of a developing economy. We started by investigating the empirical determinants of corporate cash holdings; the results showed that firm size and growth opportunities have no significant effect on corporate cash-holding decisions, while firm’s cash flow, leverage, and liquid assets substitute have a significant negative effect on cash-holding decisions, and profitability and cash dividends have a positive effect on cash-holding decisions. Then we investigated empirically how cash-holding affects the value of corporate firms. Based on Fama and French’s (1998) valuation model and Faulkender and Wang’s (2006) model, the results showed that the marginal value of each Jordanian Dinar (JD) is valued at a discounted value of 0.41 JD; with higher leverage the marginal value of cash is declining, with a higher level of cash the marginal value of cash is increasing and, finally, cash dividends have no significant effect on shareholders’ value. We also investigated empirically how a group of explanatory variables affect a firm’s debt ratio by focusing on the liquidity variable. Results showed that the total debt ratio is positively affected by firm size and is negatively affected by growth opportunities, profitability, assets tangibility and total liquidity, cash, and non-cash liquidity. The long-term debt ratio is positively affected by firm size, non-debt tax shield, asset tangibility, total liquidity, cash, and non-cash liquidity, while the long-term debt ratio is negatively affected by growth opportunities and profitability. For the short-term debt models, the debt ratio is negatively affected by firm size, asset tangibility, and liquidity in its different forms. An investigation into the speed of adjustment showed that Jordanian firms quickly adjusted the total and long-term debt ratio, while they do not have an optimal or target short-term debt ratio.

This study addresses the question of whether the relation between investor-level taxes and a firm's capital structure decisions varies predictably with financial constraints. Using the setting of the 2003 reduction in individual tax rates for ordinary income, dividends, and capital gains, this study documents that constrained firms decrease their debt use in response to the 2003 tax cuts, while unconstrained firms increase their debt use over the same period. I find these effects are only evident among firms with relatively high individual ownership, which is the group of firms that theory suggests will react to the tax cuts. This paper contributes to the literature on how investor-level taxes influence firms' financing decisions as well as the literature pertaining to the 2003 Tax Act.

This paper investigates the effect of correlation and volatilities of firm and project cash flows on the choice of project finance. I use a pure-play approach to measure unobservable project cash flows for a sample of 440 US and non-US firms that invested in 577 projects from 1990 to 2008 and find evidence that the probability of project finance is increasing in cash flow volatility difference between firm and project cash flows. The likelihood of the project finance is greater when volatilities are different and the correlation between firm and project cash flows is high. I also find that firms are likely to choose corporate finance for low correlation and low and similar volatilities between firm and project cash flows. This empirical work is consistent with the theoretical predictions in Leland (2007) that provides a potential explanation for the existence of project finance based on financial synergies.