Empirical studies have found that managers choose debt rather than equity to avoid EPS dilution and buy back outstanding shares to boost EPS, I thus explore the resulting effect of EPS on leverage. A firm’s leverage is negatively influenced by the level of its EPS. I also find that fluctuations in EPS have large effects on leverage and these effects persist for at least a decade. Besides, the negative impact of EPS on leverage becomes much stronger after the passage of SOX, in which period managers engage in more actions of debt-equity choices or stock repurchases with the sole purpose of manipulating EPS. Furthermore, managers’ equity incentives and corporate governance are two economic mechanisms through which EPS negatively influences leverage.

Em setembro de 2007 o grupo Gerdau concretizou a aquisição da siderúrgica americana Chaparral Steel, desembolsando para isso 4,2 bilhões de dólares. Para financiar esta compra, 93% do funding foi de capital de terceiros e participação de acionistas, obtidos através de operações de empréstimo, emissão de ações e de um Bond, com prazo médio total de 5 anos. As operações foram contratadas no terceiro trimestre de 2007, período no qual a crise do subprime começou a preocupar as empresas e investidores, com o reporte de contínuas perdas por mau-pagamento de hipotecas, principalmente nos Estados Unidos, afetando diversos produtos financeiros. Destaca-se nesta estruturação o fato dela ter sido premiada pela International Financing Review Awards como a melhor operação de empréstimo feita por uma empresa da América Latina em 2007 e também a questão de ser o maior valor desembolsado pelo grupo Gerdau em uma aquisição. Como um todo, a operação manteve a empresa dentro dos indicadores das melhores práticas do seu segmento e possibilitou criação de valor para os acionistas e stakeholders. / In September of 2007 the Gerdau group finalized the acquisition of the American steelmaker Chaparral Steel, with a disbursement of 4.2 billion US dollars. Only 7% of the financing of this purchase was cash, the remaining 93% was obtained through the emission of new shares, short-term and long-term debt, and a Bond, with a total average maturity of 5 years. All the operations were contracted on the third semester of 2007, when the subprime crises started to scare off companies and investors, with the continuous report of losses due to the financial structured products on the mortgages market, mainly in the US. The highlights of this structure are that it was awarded by International Financing Review Awards as the best Latin American Loan of 2007 and also, it was the most ever paid by the group in an acquisition. Last but not least, the operation kept the company in the range of the best practice ratios of its segment and allowed the creation of value for its shareholders and stakeholders.

Despite the fact that a preponderance of past studies in corporate finance mainly focus on capital structure decision of firms, the problems of “what factors determine the capital structure choice of firms and how firms adjust their capital structure dynamically” are still riddling. Hence, the aim of this study is to investigate the determinants of capital structure and capital structure adjustment dynamics of banks. To this end, the study employed a quantitative research approach. Specifically, secondary data have been collected through document review of annual reports of selected banks for longitudinal/panel research design. Besides, primary data have been collected through a self- administered questionnaire distributed to the selected Chief Financial Officers (CFOs) for the cross-sectional survey research design of the study. As the method of data analysis, the study estimates both static and dynamic panel models using fixed effect and GMM estimators respectively. Besides, in analyzing the cross-sectional survey responses, appropriate statistical techniques for order-ranked and nominal/categorical items of the responses have been employed. Specifically, in the univariate analysis of survey responses, mean scores and percentage of categorical responses have been computed for order-ranked and nominal items respectively. Moreover, to test the significance of differences of mean scores of order-ranked and percentage of responses of nominal items conditional on bank characteristics, the study employed the nonparametric Mann-Whitney test and the likelihood ratio test respectively. As the result, the tax shield from interest tax deductibility, profitability and/or size of free cash flows, growth opportunities and regulatory pressure factors are found to be significant determinants of capital structure decisions, consistently in estimations of panel models and cross-sectional survey. In iii examining the capital structure adjustment dynamics, both the regression estimation and survey results revealed the tendency of banks in Ethiopia to set target capital structure and adjust towards it at a relatively faster speed of adjustment. Besides, both regression model estimation and survey results disclose the asymmetrical target capital structure adjustment of banks. To be specific, overleveraged or undercapitalized banks adjust more quickly than underleveraged or overcapitalized banks. Further, the speed of target capital structure adjustment is found to be heterogeneous across banks that differ in their absolute deviations from target capital structure, size, regulatory pressure for capital adequacy and ownership. Hence, by empirically examining the determinants and dynamics of capital structure of banks in Ethiopia, the study contributes to the existing body of knowledge on the subject under study, and/or it fills a gap in the existing reference literature on the subject. Most importantly, the study tries to untangle the capital structure issues of banks, especially the dynamics, in the context of the least developed financial system where there are no secondary market and oligopolistic banking sector. / Graduate School of Business Leadership (SBL) / D.B.L.

Em setembro de 2007 o grupo Gerdau concretizou a aquisição da siderúrgica americana Chaparral Steel, desembolsando para isso 4,2 bilhões de dólares. Para financiar esta compra, 93% do funding foi de capital de terceiros e participação de acionistas, obtidos através de operações de empréstimo, emissão de ações e de um Bond, com prazo médio total de 5 anos. As operações foram contratadas no terceiro trimestre de 2007, período no qual a crise do subprime começou a preocupar as empresas e investidores, com o reporte de contínuas perdas por mau-pagamento de hipotecas, principalmente nos Estados Unidos, afetando diversos produtos financeiros. Destaca-se nesta estruturação o fato dela ter sido premiada pela International Financing Review Awards como a melhor operação de empréstimo feita por uma empresa da América Latina em 2007 e também a questão de ser o maior valor desembolsado pelo grupo Gerdau em uma aquisição. Como um todo, a operação manteve a empresa dentro dos indicadores das melhores práticas do seu segmento e possibilitou criação de valor para os acionistas e stakeholders. / In September of 2007 the Gerdau group finalized the acquisition of the American steelmaker Chaparral Steel, with a disbursement of 4.2 billion US dollars. Only 7% of the financing of this purchase was cash, the remaining 93% was obtained through the emission of new shares, short-term and long-term debt, and a Bond, with a total average maturity of 5 years. All the operations were contracted on the third semester of 2007, when the subprime crises started to scare off companies and investors, with the continuous report of losses due to the financial structured products on the mortgages market, mainly in the US. The highlights of this structure are that it was awarded by International Financing Review Awards as the best Latin American Loan of 2007 and also, it was the most ever paid by the group in an acquisition. Last but not least, the operation kept the company in the range of the best practice ratios of its segment and allowed the creation of value for its shareholders and stakeholders.

Em setembro de 2007 o grupo Gerdau concretizou a aquisição da siderúrgica americana Chaparral Steel, desembolsando para isso 4,2 bilhões de dólares. Para financiar esta compra, 93% do funding foi de capital de terceiros e participação de acionistas, obtidos através de operações de empréstimo, emissão de ações e de um Bond, com prazo médio total de 5 anos. As operações foram contratadas no terceiro trimestre de 2007, período no qual a crise do subprime começou a preocupar as empresas e investidores, com o reporte de contínuas perdas por mau-pagamento de hipotecas, principalmente nos Estados Unidos, afetando diversos produtos financeiros. Destaca-se nesta estruturação o fato dela ter sido premiada pela International Financing Review Awards como a melhor operação de empréstimo feita por uma empresa da América Latina em 2007 e também a questão de ser o maior valor desembolsado pelo grupo Gerdau em uma aquisição. Como um todo, a operação manteve a empresa dentro dos indicadores das melhores práticas do seu segmento e possibilitou criação de valor para os acionistas e stakeholders. / In September of 2007 the Gerdau group finalized the acquisition of the American steelmaker Chaparral Steel, with a disbursement of 4.2 billion US dollars. Only 7% of the financing of this purchase was cash, the remaining 93% was obtained through the emission of new shares, short-term and long-term debt, and a Bond, with a total average maturity of 5 years. All the operations were contracted on the third semester of 2007, when the subprime crises started to scare off companies and investors, with the continuous report of losses due to the financial structured products on the mortgages market, mainly in the US. The highlights of this structure are that it was awarded by International Financing Review Awards as the best Latin American Loan of 2007 and also, it was the most ever paid by the group in an acquisition. Last but not least, the operation kept the company in the range of the best practice ratios of its segment and allowed the creation of value for its shareholders and stakeholders.

Bastante recorrente na área de Finanças Corporativas, o estudo da estrutura de capital das empresas continua despertando o interesse de muitos pesquisadores. No entanto, a maioria das existentes trata da escolha da empresa no que diz respeito ao uso de capital próprio ou de terceiros para financiar suas atividades. Entendendo que esta decisão envolve também a opção sobre que tipo de recurso de terceiro utilizar, o presente estudo analisa a composição do endividamento da empresa em relação à fonte de financiamento: se recursos privados (i.e. dívida bancária) ou públicos (i.e. títulos de dívida). Para tanto, foram estimados modelos estatísticos tendo como variáveis as informações financeiras de empresas brasileiras com ações listadas na Bolsa de Valores de São Paulo (BOVESPA) e na Sociedade Operadora do Mercado de Ativos (SOMA) e não atuantes no setor de Finanças e Seguros. Os testes foram realizados para duas amostras distintas: uma com o total de empresas e outra apenas com as empresas que efetivamente acessaram o mercado público de dívida corporativa. Foram utilizados dados em painel e três métodos de estimação: pooled, efeitos aleatórios e efeitos fixos. Os resultados apontaram que as empresas, em geral, consideram questões relativas às suas oportunidade de crescimento futuro, disponibilidade de ativos tangíveis, nível de alavancagem e lucratividade são as variáveis relevantes para a tomada de decisão sobre que tipo de dívida utilizar. Mas a partir do momento que passam a ter acesso ao mercado público, o custo da dívida passa a ser importante, assim como o total de ativos imobilizados e nível de endividamento. Tem-se ainda que optam pela dívida privada aquelas empresas com maior potencial de crescimento e mais ativos tangíveis, além de menor lucratividade e menor endividamento. No caso das empresas com dívida pública em seu balanço, quanto menor o custo da dívida privada, maior será sua importância para as mesmas. / A subject extensively studied in the Corporate Finance theme, the capital structure researches continue to motivate annalists around the world. On the other hand, the majority of the existent papers discuss the company?s choice between own capital and third parties resources used to finance its operations. As we understand that such decision also involves the option about which third parties resources to use, the present paper analysis the company?s indebtedness composition related to the financing source: private (i.e. bank debt) or public (i.e. debt bound). For this purpose, it was estimated statistics models using as variables the financial information of the listed companies at São Paulo?s Stock Exchange (BOVESPA) and at Sociedade Operadora do Mercado de Ativos (SOMA) and that not act in the Financial Sector. The tests were done for two samples: one with all the companies and the other only with the companies that effectively used public debt. The data were disposal in panel and three models were estimated: pooled, random effects and fixed effects. The results pointed out that, in general, the companies consider the variables related to future growth opportunities, tangible assets available, indebtedness level and profitability as the major relevant to choice the type of debt related to the financing source. But when the companies access the public debt market, the debt cost becomes important, as the total tangible assets and the indebtedness level. The results also show that the private debt is preferred by the companies with bigger growth opportunities and larger volume of tangible asset, and with lower profitability and indebtedness level. For the companies with public debt on their balance sheet, the lower the private debt cost, the higher its importance to them.

Um assunto recorrente na teoria de finanças tem sido a forma que uma empresa é financiada, ou seja, sua estrutura de capital e se essa afeta o valor da firma, sua rentabilidade e sua política de investimentos. A participação de capital de terceiros na estrutura de capital das empresas é pertinente em função do efeito da alavancagem financeira, que se refere à ação de captar recursos de terceiros a uma determinada taxa e aplicá-los em ativos que oferecem como retorno uma superior a esta. Assim, ao se utilizar de dívidas, uma empresa tem a possibilidade de aumentar a remuneração dos seus proprietários e, consequentemente, seu valor, por captar recursos a uma taxa e aplicá-los em outra possivelmente maior, embora com essa decisão passe a elevar seu risco, justamente pelo fato de assim passar a ter o compromisso com os credores que realizaram o empréstimo. Percebe-se, dessa forma, um potencial relacionamento entre as decisões de financiamento e investimento. Nesse sentido este trabalho teve como objetivo inicial examinar se a alavancagem financeira afeta as decisões de investimento das empresas brasileiras não financeiras de capital aberto. Para tanto, foram aplicados modelos de regressão linear múltipla com dados em painel no período de 2001 a 2011. Os resultados encontrados permitem dizer que existe uma forte correlação negativa entre a alavancagem financeira e o investimento nas empresas brasileiras não financeiras de capital aberto e que esse relacionamento é ainda mais intenso nas empresas com baixas oportunidades de crescimento. Constatando isso e considerando que diferentes elementos do endividamento podem exercer influências no investimento, um segundo objetivo foi propor um modelo que avalie como os aspectos de maturidade, fonte e custo do endividamento impactam o nível de investimento das empresas brasileiras não financeiras de capital aberto. Foi delineado um novo modelo de regressão linear múltipla que apurasse esses aspectos. Os resultados demonstram que o modelo proposto atende a finalidade desejada. Como conclusões destaca-se que o relacionamento negativo entre alavancagem financeira e investimento encontrado neste trabalho em um país emergente se assemelha ao observado em estudos anteriores em economias desenvolvidas. Além disso, conclui-se que os elementos de maturidade (curto e longo prazo), fonte e custo do capital de terceiros são relevantes para a determinação do investimento do conjunto de empresas estudadas. / A recurring theme in finance theory has been how a company is financed, ie, its capital structure and whether this affects the value of the firm, its profitability and its investment policy. The share of debt in the capital structure of companies is relevant duo to the effect of financial leverage, which refers to the action of raising funds from third parties at a certain rate and apply them in assets that offer returns as one exceeds this. Thus, when using debt, a company has the possibility to improve the incomes of their owners and therefore its value, by raising funds at a rate and apply them in another possibly larger, albeit with this decision elevates your risk, precisely because so going to have to compromise with creditors who took the loan. Thus, perceives a potential relationship between investment and financing decisions. In that sense this study initially aimed to examine whether the financial leverage affects investment decisions of non-financial Brazilian public companies. We applied multiple linear regression models with panel data from 2001 to 2011. Our results say that there is a strong negative relationship between leverage and investment in non-financial Brazilian public companies and this relationship is even stronger in firms with low growth opportunities. Noting this and considering different elements of debt can exert influences on investment, a second objective was to propose a model to evaluate how aspects of maturity, source and cost of debt impact the level of investment by non-financial Brazilian public companies. It was designed a new model of multiple linear regression that consider these aspects. The results demonstrate that the proposed model meets the desired purpose. As conclusions highlight that the negative relationship between leverage and investment found in this study in an emerging country resembles that observed in previous studies in developed economies. Furthermore, we conclude that the elements of maturity (short and long term), source and cost of debt are relevant for determining the investment of all firms studied.

This thesis examines the impact of financial liberalisation on the capital structure of non-financial firms listed on the Johannesburg Stock Exchange (JSE). The research hypotheses have been formulated and tested by using various econometric estimation procedures. The empirical assessment begins by resolving some methodological issues relating to the dating of financial liberalisation and the measurement of leverage. Next, a panel of 100 non-financial firms is constructed for the period 1989 to 2007. The pooled Ordinary Least Squares, fixed (within), and random effects (Generalised Least Squares) models are used to estimate the impact of various aspects of financial liberalisation on firm capital structure. Robustness checks are performed by using the instrumental variable technique and the Arellano and Bond (1991: 277) two-step Generalised Method of Moments (GMM) procedure. Irrespective of the procedure used, the lifting of international sanctions and stock market liberalisation is associated with a reduction in leverage for all sets of firms. Capital account liberalisation causes firms to access more debt, and there is mild support for domestic financial sector liberalisation. Stock market liberalisation provides avenues for firms to increase their debt maturity structure. The size of the stock market is positively associated with leverage, and banking sector development is negatively correlated to leverage. The effect of financial liberalisation is more pronounced for larger firms, suggesting that the process of financial liberalisation causes a wedge between small and large firms. Furthermore, regime dummies are interacted with firm specific determinants of capital structure. The notable facts arising out of the interactive dummy variable exercise reveal that the lifting of international sanctions and stock market liberalisation cause significant structural shifts in the profitability, growth and tax rate variables. This is evident for the book and market value of the debt to equity ratio. The results of the dynamic model of capital structure document evidence of transaction costs for both the pre and post liberalisation regime. However, it appears that transaction costs reduce dramatically in the post liberalisation regime. The associated coefficient of adjustment increases accordingly. This suggests that a developed financial system promotes competition amongst the issuers of capital, thereby lowering borrowing and transaction costs. The empirical significance of firm specific determinants in a closed economy appears to be weaker than that of the post liberalised regime. Furthermore, firm size speeds up the adjustment to the target level of leverage for firms operating in both the pre and post liberalisation regimes. Finally, the results confirm most of the theoretical predictions of capital structure theories. / Thesis (PhD)--University of Pretoria, 2012. / Financial Management / unrestricted

This project is target on managing and controling of capital strucuture of companies. It is devided on two parts. The first one includes teoretical information about capital structure. The second one includes practical anlyses of capital structure of copany Ceska Zbrojovka a.s.

The goal of this thesis is the analysis of indebtedness in czech industrial companies. I try to describe the situation in particular sectors during years 2001 - 2008. The important part of this thesis is statistical chapter. There I look for relations among economic factors and also create the simple regression model. I found out the positive change of ratios, however in the year 2008 the financial crisis influenced the czech economy, which had the impact on particular sectors. I proved that the correlation between return on assets and debt ratio exists and also the model for the estimated interest rate works.