The investment opportunity set was the component of the organisation’s value resulting from the option to make future investments or growth opportunity. The value of an organisation comprised of assets in place and discretionary investments in positive net present value projects or growth opportunity. This investment opportunity set or growth opportunity was relevant to both the organisation and the economy for value creation. The discretionary investments included any discretionary expenditure necessary for the future growth the organisation and were packaged as policy decisions. This study elected debt policies, dividend policies, and broad-based empowerment shareholding as relevant policy decisions with the purpose of establishing the relationship between these policies and growth opportunity. This study was conducted over a five year period at company-level and industry-level. T-tests, correlation and regression tests were employed to explore the relationship between the variables. The results revealed that debt and growth opportunity was positively associated; dividend and growth opportunity was negatively associated although the evidence was weak; and black economic shareholding was negatively associated with growth opportunity and positively associated with assets in place. / Dissertation (MBA)--University of Pretoria, 2013. / Gordon Institute of Business Science (GIBS) / unrestricted

Debt financing can be seen as both an opportunity to increase profits as well as a financial risk and is thus an important issue for company owners to consider. This study examines the portfolio companies of the investment firms Investor and Indsutrivärden, and how their debt policies have developed from 2004 to 2022. In addition, factors that have been taken into consideration in their debt decisions are studied as well. The thesis uses a mixed methods approach by creating time series of debt levels and by conducting a content analysis of the companies’ reports and presentations. The findings show that Investor’s and Industrivärden’s portfolio companies take similar approaches to their debt policies. However, changes in the debt policies of Industrivärden’s portfolio companies indicate an impact of leadership changes within Industrivärden. Generally, the companies try to minimise the risks of their debt, considering factors such as liquidity and refinancing, financial flexibility, and credit ratings. Macroeconomic risks are also considered, which is exemplified in the management of debt maturities. Over time, an increased focus on green financing and the use of the debt-to-EBITDA ratio is identified. Consequently, the thesis contributes to the literature on corporate debt and ownership.