The transaction volumes on the Swedish real estate market have during the last few years been soaring. The correlation between the financing climate in Sweden and the transaction volumes have been eminent. In an industry where external capital is of vital essence, it is extremely important to create a financing arrangement that sustains both booms and recessions. To generate a broader view of the real estate market, the purpose of the thesis has been to survey the financing arrangements in large property transactions during an economic cycle, the last decade. Through the information the thesis has aimed for creating a view of determining factors behind the choice of financing arrangement, provide a prospective view and to explore suitable arrangements given the economy. The thesis has mainly used a qualitative approach combined with a quantitative collection of data. Thus, it is based on a survey of financing arrangements from the 4 largest transactions each year from the last decade and on information gathered through interviews with key figures from both real estate owners and real estate consultants. The gathered material indicated that the numerous companies’ different financial arrangements was defined by their purpose of ownership. The real estate owners have historically used a high degree of external financing in transactions, primarily bank debt. The banks’ willingness of lending have however varied over time which inevitably affect the companies. The more recent period of the survey shows that financing through capital markets have become an important source. Despite varying loanto- value ratios during the period, the high levels from before have not been found. The reason behind the lower degree of leverage in general is due to the fact that the real estate owners have learnt a lesson from previous crisis. Our thesis displays that financing arrangements differs depending on buyer and that it is company specific. The various arrangements depending on buyer and company have evidentially made it problematic to find direct connections between choice of financing and economy or to find basis in earlier theories. However, when it comes to the real estate owners, we were able to see resemblance of the Trade-off theory. The consistent coherence amongst the real estate owners – which also endorses the Trade-off theory – is to find a sustainable combination of internal- and external capital to, from without a defined risk profile, maximise returns. / Transaktionsvolymerna på fastighetsmarknaden har under de senaste åren varit glödhet. Det allmänna finansieringsklimatet i landet har varit starkt korrelerad till transaktionsvolymerna. I en bransch där lånekapital är av vital betydelse har det varit synnerligen betydelsefullt för aktörerna att hitta ett finansieringsupplägg som är tillräckligt slagkraftigt i både upp- och nedgång. För att bilda oss en bredare uppfattning om fastighetsmarknaden har studiens syfte gått ut på att kartlägga hur finansieringsuppläggen vid stora fastighetsaffärer har sett ut under en konjunkturcykel, det senaste decenniet. Utifrån det har studien syftat till att ge en bild kring faktorerna bakom valet av finansieringsupplägg, ge en framåtblickande syn samt försöka hitta ett förslag på ett lämpligt finansieringsupplägg givet konjunktur. Studien har huvudsakligen haft en kvalitativ ansats, kombinerat med en kvantitativ datainsamling. Studien baseras således dels på en kartläggning av finansieringsuppläggen på de 4 största transaktionerna för respektive år under det senaste decenniet och dels på information inhämtad genom intervjuer med personer verksamma inom fastighetsbolag och fastighetsrådgivning. Det insamlade materialet indikerade att de olika aktörernas finansieringsupplägg definierades av respektive aktörs ägandesyfte. Fastighetsbolag har exempelvis historiskt utnyttjat en hög grad av extern finansiering vid transaktioner, primärt bankfinansiering. Bankernas utlåningsvilja har dock från tid till annan varierat vilket påverkat företagen i allra högsta grad. Under senare delen av undersökningsperioden har även kapitalmarknaderna varit en betydande finansieringskälla. Trots varierande belåningsgrader under perioden, har de höga nivåerna från förr inte återfunnits. Anledningen har framförallt kopplats till att aktörerna lärt sig en ordentlig läxa från tidigare kriser.  Studien har framförallt visat att finansieringsuppläggen skiljt sig markant beroende på vem köparen är och att finansieringsupplägg rent generellt är väldigt bolagsspecifikt. Detta har medfört att det blivit svårt att finna direkta samband mot samtliga aktörer och kunna koppla deras agerande till tidigare teorier. Allmänt vad gäller just fastighetsbolag har vi däremot funnit störst likheter med Trade-off theory. En grundläggande tanke för många fastighetsbolag har visat sig vara att finna en stabil avvägning mellan eget- och främmande kapital för att utifrån en definierad riskprofil maximera avkastningen. Detta är också vad Trade-off förespråkar.

When society, and especially the financial markets, experience a downturn real estate companies are often front and center of discussions. This sector is a capital-intensive industry which often carries a large fraction of borrowed funds. The last decade has been marked by good economic growth, low interest rates, and rising property values which the real estate market has profited from. Public real estate companies appraise investment properties exclusively on fair value, which means that estimated market values influence companies’ financial reports. The study aims to scrutinize how property values impact debt, and further shed light on the pro-cyclical nature of property values. Using a deductive approach, fair value changes of real estate in relation to debt are analyzed through a correlation analysis and multiple regression. The study applies two dependent variables where debt-equity ratio constitutes one of them, and interest-bearing debt in relation to net operating income constitutes the other. The result shows that fair value changes have a significant weak negative correlation to the debt-equity ratio, and a non-significant weak positive correlation to interest-bearing debt to net operating income. The authors conclude that the weak correlation found in debt-equity ratio implies that real estate companies react to fair value changes. The non-significant correlation with interest-bearing debt in relation to net operating income indicates that fair value changes increase companies’ debt. Furthermore, the study shows that there are individual differences between companies. / När samhället, och i synnerhet de finansiella marknaderna, upplever försämrade tider är ofta fastighetsbolag på tapeten. Sektorn är en kapitalintensiv bransch som ofta förfogar över en stor del lånade medel. Det senaste årtiondet har präglats av god ekonomisk tillväxt, låga räntor och stigande fastighetsvärden vilket har gynnat fastighetsbranschen. Börsnoterade fastighetsbolag värderar förvaltningsfastigheter uteslutande till verkligt värde, vilket innebär att uppskattade marknadsvärden ger effekt på bolagens finansiella rapporter. Studien ämnar särgranska huruvida fastighetsvärdet inverkar på skuldsättning och vidare belysa fastighetsvärdens procykliska natur. Ur en deduktiv ansats analyseras orealiserade värdeförändringar på fastigheter i relation till skuldsättning genom en korrelationsanalys och en multipel regression. Studien tillämpar två beroende variabler där skuldsättningsgrad utgör den ena och räntebärande skulder i förhållande till driftnetto utgör den andra. Resultatet visar att orealiserade värdeförändringar har ett statistiskt signifikant svagt negativt samband med skuldsättningsgrad och ett icke statistiskt signifikant svagt positivt samband med räntebärande skulder i förhållande till driftnetto. Författarna kommer fram till att det svaga sambandet med skuldsättningsgrad antyder att fastighetsbolag agerar på orealiserade värdeförändringar. Det ickestatistiskt signifikanta positiva sambandet med räntebärande skulder i förhållande till driftnetto indikerar att orealiserade värdeförändringar ökar bolagens skuldsättning. Avslutningsvis visar studiens resultat att det finns individuella skillnader mellan bolagen

This study investigates the effect of leverage on stock returns on Swedishlisted firms (Large and Mid-cap). Stock returns have been calculated, andleverage ratios have been collected through Datastream. The results contradictfundamental theories on capital structure. According to the fundamentaltheories there should be a positive relationship, but the result of this studysuggests that the relationship is negative.

Bakgrund: Det underliggande sambandet mellan kapitalstruktur och dess påverkan på företagets lönsamhet och företagsvärde har det utförts tidigare forskning på inom många olika sammanhang och branscher. Kapitalstrukturen visar ett företags finansiering och avser fördelningen mellan eget kapital och skulder. Även fast det utförts mycket forskning på området finns en del motsättningar kring olika samband som exempelvis lönsamhetens relation till hävstången.  Syfte: Syftet med denna studie är att analysera hur kapitalstrukturen påverkar fastighets- och byggbolagens lönsamhet samt företagsvärde i Sverige under perioden år 2012–2019. Studien har även som delsyfte att undersöka bakomliggande faktorer som har en inverkan på kapitalstrukturen. Forskningsfrågor: Hur ser sambanden ut mellan finansiella nyckeltal och kapitalstrukturen över tidsperioden år 2012–2019? Hur förhåller sig kapitalstrukturen till lönsamheten och företagsvärdet? Vilka bakomliggande faktorer kan tänkas ha haft en inverkan på kapitalstrukturen och varför har det i så fall sett ut som det har gjort? Metod: En kvantitativ metod har använts för att besvara studiens syfte. För att analysera data har flera paneldataregressioner genomförts, där data har korrigerats för att få ett trovärdigt resultat. Resultatet baseras på data från börsnoterade företag inom byggbranschen och fastighetsbranschen.  Resultat: Studien resulterade i totalt 16 statistiskt signifikanta samband, men där fyra av dessa kan ses som otillförlitliga på grund av autokorrelation. De mest framträdande sambanden gäller tillväxtens påverkan på skuldsättning, företagsstorlekens påverkan på lönsamhet samt riskens påverkan på både skuldsättning och lönsamhet. Även skuldsättning och lönsamhet uppvisar starka samband med varandra. Studien visar att tillväxten har både positiva och negativa samband till hur företagen förhåller sig till skuldsättningen. Företagsstorleken uppvisar uteslutande positiva samband med både skuldsättning och lönsamhet, vilket ligger i linje med tidigare forskning. Risken visar ett negativt samband med skuldsättningsgrad för båda branscherna. Författarna anser att påverkande faktorer är rådande ränteläge, skattenivåer, fastighetsbranschens unika tillgångssammansättning samt företagens syn på belåning. / Background: The underlying relationship between capital structure and its impact on the company’s profitability and company value has been widely studied in different contexts and industries. The capital structure shows the company’s financing and defines the relationship between equity and debt. Even if the field has been widely studied there is still some disagreements about different underlying relationships, for example the profitability’s connection to leverage.  Purpose: The purpose of this study is to analyze how the capital structure affect the real estate- and construction companies’ profitability and company value in Sweden during the period 2012-2019. This study also has a secondary purpose to study underlying factors which has an impact on the capital structure.  Research questions: How does the relationships appear between financial key figures and the capital structure during the period 2012-2019? How does the capital structure relate to profitability and company value? Which underlying factors can be supposed to influence the capital structure and what is the reason for this? Method: A quantitative method has been used to fulfill the study’s purpose. To analyze the data various panel data regressions has been implemented, where the data has been adjusted to gain a more reliable result. The result is based on data from listed companies within the real estate- and construction industry. Results: This study resulted in totally 16 statistically significant relationships, but where four can be seen as unreliable due to autocorrelation. This most prominent results are the growth effect on debt, company size’s effect on profitability and the risk’s effect on both debt and profitability. Debt and profitability also show strong connections. This study implies that growth has both positive and negative relationships with debt. Company size only shows positive connections to both debt and profitability, which is in tune with previous studies. Risk has a negative relationship with debt-to-equity ratio in both industries. The authors thinks that influential factors could be today’s levels of interest rate, levels of taxes, the real estate industry’s uniqe proportion of their assets and the companies’ attitude to debt.

The importance of testing the co-alignment model has been emphasized by several researchers in the past. The present study is an attempt to test the model using theories in corporate finance and strategic management, which will also prove the commonalties that exist between these domains of business research. This will help support the arguments of some researchers in the hospitality industry who have stressed the importance of assessing the firm's strategies using concepts in finance. The overall objective of this study is to test the viability of the co-alignment model using strategic management and corporate finance theory. The present study identifies the dimensions and variables using prior research within each of the constructs studied under the management and corporate finance domains, vis-a-vis environment risk, corporate strategy, capital structure and firm performance. The relationship between the constructs and dimensions were tested for the dependencies between them using surrogates used in prior research through a priori hypothesized relationships. The unit of analysis was the corporate level, and hence, the study included corporate level data of restaurant firms. The research design included cross-sectional data of restaurant firms that were averaged across an a priori defined time period. These firms were selected based on certain criteria that helped control for country effects and industry effects. Therefore, the publicly traded firms selected as part of the sample were based in the U.S. serving markets predominantly within the country. The statistical analysis was conducted using cross-sectional regression. Results indicate that a high variance in firm performance is explained by the co-alignment between environment risk, corporate strategy, and capital structure. Furthermore, the hypothesized relationships between variables that represent the constructs hold good while using accrual and cash flow returns as surrogates of firm performance. This key finding provides the base for future research efforts, which could focus on developing the model through the use of surrogates that are used in both strategic management and corporate finance research. Also, the sample could be extended to include privately owned restaurant firms that serve markets within the U.S., which will help improve the generalizability of the co-alignment model. / Ph. D.

La comprensión y respuesta del impacto del financiamiento externo en la productividad de las empresas es un tema que, en la actualidad, los gerentes deben considerar en el marco de las decisiones financieras. En la actualidad, los gerentes deben tomar la decisión sobre si es el momento oportuno de acceder a un financiamiento externo y si esta es la mejor decisión para lograr el crecimiento de la empresa. El propósito de esta investigación es brindar a los gerentes una herramienta que les permita conocer y analizar los diferentes criterios que deben considerar en la toma de decisiones al momento de acceder al financiamiento externo. Siendo la elección de la estructura de capital, el apalancamiento, el gobierno corporativo y la fuerza laboral los subtemas que se deben considerar y cómo la relación entre ellos define el impacto que tendrá el financiamiento externo en la productividad de la empresa. De esta manera, el desarrollo de esta investigación se sustenta en diferentes fuentes de especialistas en la materia en los últimos años, busca aportar académicamente en los temas relacionados con el financiamiento externo y su impacto en beneficio de la productividad. En tal sentido, la información obtenida permite a los gerentes, administradores, investigadores y estudiantes relacionados con el mundo de las finanzas ampliar el panorama respecto a las decisiones de financiamiento externo y como, en base al modelo de gestión propuesto, las empresas obtendrán beneficios en términos de rendimiento, desarrollo económico, rentabilidad y productividad. / The understanding and responding to the impact of external financing on company productivity is an issue that managers must now consider in the context of financial decisions. Today managers must make the decision about whether it is the right time to access external financing and whether this is the best decision to achieve the growth of the company. The purpose of this research is to provide managers with a tool that allows them to know and analyze the different criteria they should consider in decision-making when accessing external funding. Being the choice of capital structure, leverage, corporate governance and labor force sub-items to be considered and how the relationship between them defines the impact that external financing will have on the company's productivity. In this way, the development of this research based on different sources of specialists in the field in recent years seeks to contribute academically on the topics related to external financing and its impact for the benefit of productivity. In this sense, the information obtained allows managers, administrators, researchers and students related to the world of finance to broaden the landscape regarding external financing decisions and as based on the proposed management model companies make profits in terms of performance, economic development, profitability and productivity. / Trabajo de Suficiencia Profesional

The banking industry in India has undergone many phases in its history; evolving from a regulated, decentralised system in the early 1800’s, to a regulated, centralised system during British rule, to a nationalised system following India’s independence, and finally a combination of a nationalised and private system adopting global standards as it currently stands. This study has two main aims. Firstly, it will assess the relationship between the firm-specific determinants of capital structure, based on the prevailing literature, and the capital structure of public and private sector banks in India. Secondly, it will determine whether there is a difference in the firm-specific factors that contribute to the determination of the capital structure of public sector banks and private sector banks. This study adopts quantitative methods, similar to previous studies on the relationship between capital structure and its firm-specific determinants. The dependent variable, being total leverage, is regressed against multiple independent variables, being profitability, growth, firm size and credit risk (hereinafter referred to as “risk” unless otherwise indicated) in a multivariate linear regression model. This study adds to the current literature by applying the same firm-specific independent variables to the case of private and public sector banks and then to evaluate and compare the similarities and differences between the regression outputs. The results show that for private sector banks, all independent variables are statistically significant in explaining total leverage, where all the independent variables conform to the current literature on capital structure – profitability (-), firm size (-), growth (+) and credit risk (-). Conversely, for public sector banks, all independent variables were considered to be statistically significant, except for credit risk – profitability (-), firm size (+) and growth (+). These results imply that credit risk is not an important determination in a nationalised banks’ capital structure; thus, providing evidence for the moral hazard theory of public sector banks.

The choice of a corporation’s capital structure is a complex process determined by several factors. The academia and the business industry have both been enamored with finding the determinants of capital structure, as there has been evidence that the profitability of firms is influenced by financing decisions. Nevertheless, the determinants are so far inconclusive. Moreover, they are dependent on both internal and external factors. However, previous research has generally focused solely on internal or external factors. Therefore, this thesis aims to capture a combination of firm-specific factors and macroeconomic variables affecting capital structure decisions. We focus on Swedish firms listed on Nasdaq OMX. To investigate which internal and external factors affect the capital structure, an unbalanced fixed effects data multiple linear regression was performed. The regression tested several hypotheses derived from previous studies, where the trade-off theory and the pecking order theory were used as a base. Our results indicate that for internal factors, the pecking order theory is superior at explaining financial decisions in Swedish companies compared to the trade-off theory. When it comes to external factors, the pecking order theory provides a more accurate framework. However, it should be noted that the results are not unambiguous. The ambiguity of the results suggests one very important conclusion. Neither of these two theories have the capability to fully explain how firms decide their capital structure. Each model contributes with some pieces of the puzzle, but both contain limitations.

This study aims to search for a relationship between enterprise value and capital structure. It specifically targets the Swedish stock market OMXS small cap, observing 48 companies listed on the market between the years 2014-2019. The methodology used is a multiple regression analysis with the dependent variable being the enterprise value and the independent variable being the debt to equity ratio along with five other mediating variables.  The result of the analysis show a statistically significant but negative relation between enterprise value and debt to equity ratio, generating evidence supporting the pecking order theory. / Denna studie syftar till att undersöka om det finns en relation mellan företagsvärde och kapitalstruktur. Urvalet för studien är bolag noterade på Stockholmsbörsen OMXS small cap, där 48 bolag identifierats mellan åren 2014-2019. Metoden som applicerats för att undersöka denna studie är en multipel regressionsanalys där den beroende variabeln är företagets värde och den oberoende variabeln är skuldsättningsgraden samt ytterligare fem oberoende variabler.   Regressionsresultatet visar på ett statistiskt signifikant samband mellan företagsvärde och skuldsättningsgrad som även är negativt, vilket genererar bevis som stöder pecking order teorin.

Intresset för samhällsfastighetssegmentet har ökat kraftigt de senaste åren. På grund av den demografiska utvecklingen i Sverige har behovet av bland annat äldreboenden, skolor och vårdfastigheter blivit allt större. Samtidigt har landets kommuner inte råd att bekosta behoven själva, vilket medför att denna typ av fastigheter säljs av till privata aktörer. Till följd av detta ges samhällsfastighetsbolagen stora expansionsmöjligheter och allt fler aktörer söker sig till segmentet. Samhällsfastigheter karaktäriseras av låg risk och stabila kassaflöden. Detta beror främst på långa hyreskontrakt och säkrade hyresgäster i form av kommun, stat och landsting. Fastighetsbolag och långivare ser fastigheterna som en trygg investering vilket medfört att aktörerna i segmentet haft en god tillgång på kapital. Fastighetssektorn är en kapitalintensiv bransch och samhällsfastigheter lämpar sig väl för högre skuldsättning eftersom tillgångarna är trygga och mindre konjunkturkänsliga. De allra största aktörerna med hög rating finansierar sig främst via kapitalmarknaden eftersom prissättningen på sådana skuldinstrument varit mer fördelaktig. Mindre bolag har inte samma tillgång till kapitalmarknaden och finansierar sig därför huvudsakligen med bankskuld. Rating har blivit allt viktigare för bolagen och de som hamnar inom Investment Grade tardel av mycket låga räntekostnader på sina skuldbärande kapitalmarknadsinstrument. Hybridobligationer har använts som ett medel för att uppnå en högre rating. Då hybriden kan räknas som eget kapital stärks balansräkningen och nyckeltalen. Många år av låg ränta har skapat gynnsamma marknadsförhållanden. Överskottet på kapital har gjort att investerarna jagar avkastning och företagen vänder sig i allt högregrad till obligationsmarknaden för finansiering. Skärpta kapitaltäckningskrav på bankerna gör samtidigt att banklån blir dyrare, vilket ytterligare bidrar till kapitalmarknadens tillväxt. De största bolagen besitter stordriftsfördelar och premieras av investerare, vilket leder till att dessa aktörer fortsätter dominera segmentet framöver. / The interest for the public property segment has increased substantially in recent years. Due to the demographic development in Sweden, the need for retirement homes, schools and nursing homes among others, has grown bigger. At the same time the country’s municipalities can’t afford to fund the needs themselves, which means that these properties are sold out to private companies. As a result, the public property companies are given great opportunities for expansion and even more companies are looking to invest in the segment. Public properties are characterized by low risk and stable cash flows. This is mainly because of long leases and secured tenants in the form of municipalities, state and county. Real estate companies and lenders see the properties as a safe investment, which has resulted in good access to capital for the operators in the segment. Real estate is a capitalintensive sector and public properties are suitable for higher indebtedness since the assets are secure and less sensitive to economic cycles. The very largest real estate companies with a higher rating are financed mainly through the capital market since pricing on such debt instruments have been more favorable. Smaller companies don’t have the same access to the capital market and are therefore mostly financed by bankloans. Rating has become increasingly important to the real estate companies and those within Investment Grade utilize very low interest rate costs on their debt bearing instruments from capital markets. Hybrid bonds have been used as a means to gain a higher rating. Ast he hybrid can be counted as equity, the balance sheets and key performance indicators are strengthened. Many years of low interest rates have created favorable market conditions. The excess of capital has made the investors chasing yield and the companies are turning to the bond markets for financing to greater extent. At the same time, stricter capital adequacy requirements for banks have made bank loans more expensive, which further contributes to the capital markets growing. The largest companies benefit from economies of scaleand are rewarded by investors. This leads to the companies remaining to dominate the segment ahead.