The private equity industry has become a progressively more critical source of capital and effective governance for companies. The majority of capital raised by private equity funds is used for leveraged buyouts, with total funds under management amounting to R109 billion in 2009 for the South African industry. These funds are typically enhanced with additional deal level debt financing for each buyout thus representing, ex-ante, an active capital structure decision. The objective of this study was to understand the determinants of decisions on the extent and type of leverage used in LBOs, and attempts to explain why the observed financing choices were made by the individual private equity firms. Buyouts totalling over R 26 billion and spanning the period 1998 to 2010 are analysed. The findings are consistent with the predictions of the agency costs, trade-off and market timing theories of capital structure decisions; while little support is found for the pecking order and signalling theories. The results indicate clear patterns that lead to the supposition of an underlying model in which LBO sponsors seek to balance potential leverage related benefits with leverage related costs. The study also finds suggestive evidence indicating that the LBO financing package is designed methodically to respond to differences across firms in their size and maturity, growth prospects, in the variability of their earnings, and to a lesser extent the tangibility of their assets. Copyright / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

Banks face market pressure when determining their capital structures because they are subject to strict regulations. CFOs are willing to adjust their company’s capital structures in order to obtain higher ratings. The credit ratings are highly valuable not only because they assess the creditworthiness of the borrowers but also because those agencies take advantage of the information asymmetry and have access to data that companies might not disclose publicly. Also, this industry gained much interest after the BIS proposals back in 1999 and 2001 that the Basel Committee on Banking Supervision should consider the borrower’s credit ratings when examining banks’ solvency and adequacy. Factors used to determine the credit ratings are banks’ asset quality which is fundamental measure for the creditworthiness, banks’ capital which is related to the asset quality in relation to the RWA, banks’ profitability, and liquidity measurements. The purpose of this paper is to investigate whether the banks that keep excess equity to balance sheet receive better credit ratings, given the predictors capital, banks size and defaulted to total exposures. The European Banking Authority (EBA) stress test results are used as a benchmark for determining banks’ capital adequacy and solvency, whereas the credit ratings are obtained shortly after the EBA’s reports publication. The sample size is 73 and 95 banks for the years 2011 and 2014, respectively. The results from the multivariate ordinal regression do not show significant correlation results between the excess equity to balance sheet and the credit ratings, even though the estimated coefficient is negative, namely excess equity is associated with lower credit ratings. An explanation to this one can find in the low-quality capital relative to the banks’ capital base. Also, banks which plan to implement risker projects or currently hold risker assets are subject to higher capital requirements. Moreover, banks currently being rated low but with the potential of being upgraded would be more willing to issue equity than debt in order to avoid the corresponding risk and achieve the higher rating. The equity ratio and the defaulted to total exposures ratio show significant correlation to the banks’ credit ratings. Overall, since the results of the regression are insignificant, we do not have reasons to believe that holding excess equity is not beneficial for banks. When banks make changes in their leverage ratios they would either carry the cost of being downgraded or the cost related to issuing more equity, therefore at the end they will balance the leverage ratio close to the optimal and keep as much capital as required by regulations.

Relationen mellan kapitalstruktur och skuldsättningsgrad har undersökts i flera år och många teorier utvecklades för att kunna studera ämnet närmare. Studien tar därmed hänsyn till vilket inflytande kapitalstrukturen har på företag i fastighetsbranschen och tillverkning & industribranschen. Detta för att finna möjliga relationer som finns mellan kapitalstrukturens och finansieringsmöjligheternas påverkan på företagens skuldsättningsgrad. Uppsatsen undersökte variablerna företagsstorlek, bransch, soliditet och långsiktiga skulder till kreditinstitut. Dessutom, för att finna olika samband med hänsyn till skuldsättningsgrad och slutligen hur dessa har en påverkan på kapitalstrukturen hos företag. Variablerna tar hänsyn till finanskrisen och COVID-19 pandemin och studeras därmed vid fyra olika tidpunkter. De åren som tas i beaktning är 2008, 2010, 2018 samt 2020, detta för att urskilja om sambandet skiljer sig åt när ekonomin i Sverige varierar. De teorierna som gav stöd och underlag för denna studie var Modigliani och Millers teorem om kapitalstruktur, pecking order teorin, trade off teorin och agentteorin. Samtliga teorier undersökte sambandet mellan kapitalstrukturen och lönsamheten samt beskrev hur företag bör finansiera sin verksamhet för att uppnå en optimal skuldsättningsgrad i förhållande till kapitalstrukturen. Uppsatsen tillämpade kvantitativ ansats med hjälp av tre hypotesprövningar som testats med hjälp av Chi-två test, korrelationsanalys samt multipel regressionsanalys. Utifrån studiens resultat och tidigare studier kan man säga att företagsstorlek medför att företagen har olika uppsättningar av eget kapital och skuld. Olika omvärldsfaktorer kan ha en påverkan på skuldsättningsgraden där företag i olika storlek påverkas i olika grad. Exempelvis som asymmetrisk information som i sin tur tar hänsyn till företagsstorleken där den externa påverkan från ett mindre företag inte skulle vara lika stort som ett stort företag. Fastighetsbranschen tenderar att vara mer skuldsatt än tillverkning & industribranschen. Då fastighetsbranschen är mer kapitalintensiv till följd av kostsamma projekt vilket medför att de har stora långfristiga lån för att kunna driva verksamheten. Vidare finansieras dessa branscher på olika sätt. Exempelvis kan fastighetsföretagen ställa sina fastigheter som säkerhet för lånen och därmed anses ha bättre förutsättningar för att ta högre lån. Medan tillverkning & industribranschen har sina lång- och kortfristiga skulder fördelade i flera led, exempelvis underleverantörer. När ett företag väljer att finansiera verksamheten internt genom internt genererat kapital påverkas inte skuldsättningsgraden av långfristiga skulder till kreditinstitut. Däremot om de väljer att finansiera verksamheten externt sänker det företagsvärdet och därmed också soliditeten samt att företaget ökar storleken på långfristiga skulder till kreditinstitut. Studiens resultat finner stöd i olika teorier och tidigare forskning, därmed bidrar studien till en konsensus och studiens resultat är generaliserbar i Sverige. Framtida forskning bör studera fler branscher, annat kan vara att studera andra faktorer som kan ha en påverkan på kapitalstrukturen. / The relationship between capital structure and debt ratio has been investigated for years and many theories were developed to study the subject more closely. Thus, this study considers the influence the capital structure has on companies in the real estate and the manufacturing & industrial industry. This is to find possible relationships that exist between the influence of the capital structure and the financing possibilities on the companies' debt ratio. The essay examined the variables company size, industry, equity and long-term liabilities to credit institutions. In addition, to find different relationships regarding debt ratio and finally how these have an impact on the capital structure of companies. The variables consider the financial crisis and the COVID-19 pandemic and are thus studied at four different times. The years that are considered are 2008, 2010, 2018 and 2020, this is to discover whether the relationship differs when the economy in Sweden varies. This report is written in Swedish. The theories that provided support for this study were Modigliani and Miller's theorem on capital structure, the pecking order theory, the trade off theory and the agency theory. All of which examined the relationship between the capital structure and profitability and described how companies should finance their operations to achieve an optimal debt ratio in relation to the capital structure. This report applied a quantitative approach using three hypothesis tests that were tested using the Chi-Square test, correlation analysis and multiple regression analysis. Based on the results and previous studies, company size indicates that companies have different amounts of equity and debt. Different external factors can have an impact on the debt ratio, where companies of different sizes are affected to different degrees. For example, asymmetric information which in turn results in different influences regarding if the company is big or small. Where external influence from a smaller company would not be as great as a large company. The real estate industry tends to be more indebted than the manufacturing & industrial industry. As the real estate industry is more capital intensive because of costly projects, which means they have large long-term loans to be able to run the business. Furthermore, these industries are financed in different ways. For example, real estate companies can pledge their properties as collateral for loans and are thus considered to have better conditions for taking out higher loans. While the manufacturing & industrial sector has its long-term and short-term liabilities distributed among several levels, for example subcontractors. When a company chooses to finance operations internally through internally generated capital, the debt ratio is not affected by long-term debts to credit institutions. On the other hand, if they choose to finance the business externally, it lowers the company's value and thus also the equity ratio, and the company increases the size of long-term liabilities to credit institutions. The study's results find support in various theories and previous research, thus the study contributes to a consensus and the study's results are generalizable in Sweden. Future research should therefore study more industries that are more different from each other. Another could be to study other factors that can have an impact on the capital structure.

The purpose of this thesis is, first, to explore the presence and meaning of Foucault’s heterotopia within William Shakespeare’s “Hamlet”and Beaumont and Fletcher’s “The Knight of the Burning Pestle.” The heterotopia is a privileged space of self-reflection created by individuals or societies in crisis. In each play, the presence of crisis is explained though the metaphor of syphilis; to which individual characters respond by entering the reflective space of the heterotopia in order to countenance and “cure” their afflictions. The second purpose of this thesis is to examine the ways in which the crises acted upon the stage reflect pressing social anxieties of late – Elizabethan and early- Jacobean England: succession to the throne and shifting market structure. Both playwrights create heterotopic space for their audience through the structure of their dramatic work, and ask their audience to enter this reflective space, and consider –and learn from – their remarks upon the state of society.

This study applies the Vasicek stochastic interest rate model in order to determine optimal capital structures for listed firms. A Swedish interest rate data set is used to estimate Vasicek model parameter that are reliable and independent of initial start values. These interest rate parameters are then used in a capital structure model which is evaluated through a sensitivity analysis and a firm-specific analysis which is applied to listed Swedish firms. The tax benefits of debt must be balanced against transaction costs and bankruptcy costs when determining optimal leverage ratio and optimal debt maturity. The results imply that firms should primarily focus on the long-term mean parameter of the interest rate process, the volatility of its firm value, the transaction cost of issuing debt and the effective corporate tax rate when choosing a capital structure. The capital structure model is well-founded in previous research and yields results which align with empirical data quite well. The conclusions of this study has implications for corporate finance, as the Vasicek model provides a better understanding of the stochastic nature of interest rates and its influence in determining optimal capital structures. / Denna studie tillämpar Vasiceks stokastiska räntemodell för att bestämma optimala kapitalstrukturer för noterade företag. Vasicekmodellen anpassas till ett Svensk dataset över räntor för att estimera parametrar. Dessa parametrar används sedan i en kapitalstruktursmodell för att analysera modellens känslighet för variationer i parametrar samt för att härleda optimala kapitalstrukturer för en rad Svenska noterade bolag. Skattefördelarna av skuld måste balanseras mot transaktionskostnader av skuldemissioner och konkurskostnader vid bestämning av optimal skuldsättningsgrad och optimal skuldlöptid. Resultaten antyder att företag bör primärt fokusera på det långsiktiga medelvärdet av den stokastiska ränteprocessen, volatiliteten av bolagsvärdet, transaktionskostnaden av skuldemissioner och effektiva bolagsskatten när de väljer en kapitalstruktur. Denna studie har implikationer för finansieringsteori då Vasiceks modell närmare modellerar räntors stokastiska dynamiker och dess påverkan på bestämning av bolags kapitalstrukturer.