The objective of this study was to investigate the effect of macroeconomic conditions on capital structure choices of listed South African firms. Three variables were identified to be of interest, namely: real gross domestic product (GDP) growth rate, inflation rate, and unemployment rate. The sample consisted of 230 listed firms, and analysis was done through fixed-effect regression. Macroeconomic variables were found to have an effect on capital structure choice of firms. Real GDP growth was found to have a positive influence on long term and overall leverage. Whilst inflation was found to have a negative effect on long term and overall leverage. Unemployment rate, on the other hand, was found to positively influence long term leverage, short term leverage and overall leverage. The findings from this study on the influence of both real GDP growth and inflation on leverage suggest that firm management make decisions on issuance of short term debt in a different manner to long term debt. The same was not true with unemployment rate though, this variable influenced both types for leverage in a similar manner. These findings have some implications for how managers should think about macroeconomic changes when making decisions on their firm‟s capital structure. / Dissertation (MBA)--University of Pretoria, 2014 / pagibs2015 / Gordon Institute of Business Science (GIBS) / Unrestricted

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This study examines how the investment opportunity set of the firm affects financing choices the firm makes. In a two-period, one decision, no-tax model, we show that firms characterized by a high level of investment opportunities in future periods issue equity and convertible securities while firms with fewer investment opportunities in future periods issue straight debt. Our empirical design improves upon previous studies in two important ways. First, we treat convertible debt separately from straight debt. Second, in addition to examining the correlation between investment opportunity and debt-asset ratios, we examine the incremental financing decision using discrete choice analysis. We find that the level of investment opportunities of firms making public issues of equity and convertible debt are higher than those issuing straight debt. Also, there is a negative correlation between investment opportunities and debt-asset ratios. We interpret these results to mean that investment opportunities are an important determinant of the firm’s financing policy. The direction of this relationship is the same as that predicted by the tax models of DeAngelo and Masulis (1980) and Dotan and Ravid (1985), and agency models of Myers (1977), Jensen (1986) and Stulz (1990). / Ph. D.

Many organisations today are still not making use of Management Accounting tools to assist in providing sustainability information for decision-making and the influence this can have on the financial performance of an organisation. This may have a negative impact on the financial performance of organisations, the result of the number of errors and miscalculations that can occur, including obsolete cost drivers; miscalculated business decisions, inaccurate information and human errors. Without applying Management Accounting tools, managers of organisations may find it difficult to improve the day-to-day operations and to take decisions to enhance the financial performance of their business. In this study, information was collected from interviews to determine whether Management Accounting tools could provide sustainability information for decision-making, and how this would influence the financial performance of an organisation. The research was carried out in organisations listed on the JSE. This study found that Management Accounting tools are important in providing sustainability information for decision-making and in determining how this information influences the financial performance of JSE listed organisations. Furthermore, Management Accounting tools provide strategies that influence decision-making and performance, although decision-making is the responsibility of executives or directors of the organisations. The study also found that Management Accounting tasks are performed by financial managers who focus solely on financial statements and reporting. Hence future research should focus on the importance of devolving Management Accounting roles to financial accountants or managers to enable the organisation to focus on different reports for different outcomes. / Management Accounting / M. Phil. (Management Accounting)

Submitted in compliance with the requirements for the Doctorate degree in Technology, Department of Public Management and Economics, Durban University of Technology, 2014. / Identifying the best level of debt financing within corporations and its determinants is one of the main issues in financial management theory, as the use of debt is believed to have an important influence on the performance of corporations. The majority of studies on debt financing have been undertaken using data from developed economies, focusing more on private sector non-financial corporations. This study investigated the factors influencing debt financing and whether the use of debt positively or negatively influences the financial performance of state corporations in Kenya. The “financial leverage”, which is the proportion of debt financing of state corporations in the Kenyan region, based on the total debt and the total assets, was the object of analysis for the period 2007 to 2011. Applying both descriptive and inferential statistics, and a hybrid of cross sectional and longitudinal quantitative surveys, primary data from questionnaires, and secondary data from the corporations’ financial statements, were utilized. The sample size used was 50 income generating state corporations in Kenya. Using the primary and secondary data, the study, in addition, determined the extent of debt financing and analysed the different types of debt financing used by the various state corporations. It focused on the use of financial ratio analysis to identify the financial performance of the corporations by applying a pooling of cross-section analysis. Moreover, the “financial leverage” ratio was analysed in correlation with the financial performance ratios, in order to identify the potential of anticipation for future financing options for state corporations in Kenya. Further, the regression analysis result was used to demonstrate whether there is a relationship between the corporation’s “financial leverage” and its financial performance ratios and the debt financing theory suitable for explaining debt capital structure within the state corporations. The panel data for financial performance helped in identifying whether there was a significant relationship between “financial leverage” of corporations and their financial performance. The results identified the main factors influencing debt financing within state-owned corporations in Kenya to include profitability, asset tangibility and corporation growth. It was also determined that debt financing is inversely related to financial performance of state-owned corporations in Kenya. In addition, the results revealed that state-owned corporations from developed and developing economies use capital market debt securities, such as bonds and notes, and derivative financial instruments, such as swaps, options and forward contracts. In contrast, these types of debt are not common within the Kenyan state-owned corporations. The developed and developing economies state-owned corporations are perceived to have embraced the new public sector financial management reforms agenda and operate in more developed and efficient capital markets. However, in Kenya, the new public sector financial management agenda may have not been implemented positively within the state-owned corporations and the country’s capital market may still be efficient. It is expected that the findings of this study would have vital policy implications for Kenyan state-owned corporations, in particular, and the government, in general.

Thesis (MBA (Business Management))--University of Stellenbosch, 2009. / ENGLISH ABSTRACT: The research report investigated scrip dividends declared by companies on the Johannesburg Stock Exchange (JSE). Scrip dividends started becoming popular in 1993, due to the introduction of the secondary tax on companies (STC). The purpose of the study was to calculate the total amount of money not paid out as dividends, but retained within the company as cash. No single source could be found which provided sufficient dividend information. Eventually the JSE Monthly Bulletin, Reuters, McGregor BFA and the Hamman financial dataset had to be combined to collect a single set of scrip dividends. Changes in the number of shares issued were used as a way to calculate scrip dividends that were not available, or to crosscheck with the Hamman dataset. All along the way various validations were performed to ensure data consistency. For example, the percentage of shares for which scrip dividends were paid out was checked to ensure that the calculated amount of scrip shares issued were within acceptable boundaries. Furthermore, the equivalent scrip option value on the last date to register (LOR) was compared to the cash dividend option to ensure that the values were of equivalent sizes. In total, 754 scrip dividends were included in the report. For these dividends, R33 265 million was not paid out as cash dividends, but retained within the company. The equivalent share value of those shares on the LOR is R35 337 million. Only R19 576 million was paid as cash. This means that 63% of the total dividend payout was reinvested in the companies. Analysis of the LOR dates shows that 1995 to 1997 were the most popular years for scrip, with more than 130 cases every year. From 1994 to 2000, there were more than 40 scrip dividends every year. Not much has been written in South Africa about the impact and usage of scrip dividends. The research report has for the first time created a consolidated datasheet containing scrip dividend details, allowing further research. The R33 265 million reinvested in the economy has perhaps helped fuel the successful growth of the South African economy over the last 10 years. / AFRIKAANSE OPSOMMING: Die navorsingsverslag ondersoek skripdividende wat verklaar is deur maatskappye op die Johannesburgse Effektebeurs (JSE). Skripdividende het gewild begin raak in 1993 as gevolg van die bekendstelling van sekondêre belasting op maatskappye (STC). Die doel was om die totale kontantbedrag te bereken wat behou is in die maatskappy, en dus nie uitbetaal is as dividende nie. Geen enkele bron kon gevind word wat volledige inligting oor skripdividende bevat het nie. Uiteindelik is die JSE Monthly Bulletin, Reuters, McGregor BFA en die Hamman finansiele datastel gekombineer in 'n enkele versameling van skrip dividende. Veranderinge in the totale hoeveelheid uitgereikte aandele is gebruik as 'n manier om die skrip aandele wat uitgereik is te bereken, en te korrelleer met die Hamman datastel. Gedurende die dataversamelingsproses is daar verskeie toetsdatapunte bereken, om die data integriteit te verseker. Byvoorbeeld, die persentasie aandele waarvoor skrip uitgereik is, is geverifieer om seker te maak dat die berekende hoeveelheid skrip aandele binne geldige grense was. Verder is die kontantwaarde van die skrip aandeel, soos op die laaste dag van registrasie (LOR), vergelyk met die kontant dividendopsie, om te verifieer dat die waardes van soortgelyke groottes was. In totaal is daar 754 skripdividende ingesluit in die verslag. Vir hierdie dividende is R33 265 miljoen nie uitbetaal as kontant dividende nie, maar as skrip aandele. Die ekwivalente aandeelwaardes van hierdie uitgereikte aandele op die LOR was R35 337 miljoen. Slegs R19 576 miljoen is uitbetaal as kontant. Dit beteken dat 63% van die totale dividenduitbetaling herbelê is in die maatskappye as skrip-aandele. Analise van die dividend LDR datums wys dat 1995 tot 1997 die gewildste jare was vir skrip, met meer as 130 gevalle per jaar. Van 1994 tot 2000 is daar elke jaar meer as 40 skripdividende uitgereik. Daar is nog nie veel oor die impak en gebruik van skripdividende in Suid-Afrika geskryf nie. Die navorsingsverslag het vir die eerste keer 'n gekonsolideerde skripdividend datastel geskep waarmee verdere navorsing gedoen kan word. Die R33 265 miljoen wat herbelê is in die ekonomie het moontlik bygedra tot die ongekende groei in die Suid-Afrikaanse ekonomie oor die laaste 10 jaar.

published_or_final_version / Real Estate and Construction / Master / Master of Science in Real Estate and Construction

published_or_final_version / Management Studies / Master / Master of Business Administration

This research examines whether firms managed earnings in the year they adopted SFAS 109, Accounting for Income Taxes (or its predecessor SFAS 96), by combining the choice to adopt SFAS 109 with other accounting choices in an interdependent rather than independent manner. Prior literature generally analyzes only one specific accounting choice, assuming that the decision is independent of other accounting procedure choices. However, it is unlikely that managers act in this manner. When attempting to achieve certain income goals, managers have numerous accounting tools available to them including the choice of accounting procedures and the exercise of judgment as to accrual amounts. This study investigates five choices consisting of: (1) the adoption of SFAS 109/96; (2) the adoption of SFAS 106; (3) the reporting of a restructuring of operations and/or a write-down of assets; (4) the reporting of asset sales; and (5) the choice of discretionary accruals. The study adopts both a portfolio and joint decision approach. The portfolio approach combines the earnings effects of the five choices into a single dependent variable and tests income smoothing, big bath, and debt hypotheses. The joint decision approach utilizes simultaneous equation methodology to investigate the interdependence of the five choices and the independent variables. The portfolio approach findings provide evidence that firms used the combined effect of the five accounting choices to smooth income in the year they adopted FAS 109/96. The results also provide support for the debt hypothesis but do not support the big bath hypothesis. The joint decision approach findings provide evidence that firms jointly determined at least two of the five accounting choices. The strong support for the income smoothing hypothesis under the portfolio approach combined with the joint significance of the individual accounting choices in the simultaneous equations suggests that firms use a multitude of accounting choices to manage earnings and that some of those decisions are made jointly, not independently.