: Elmar Puntaier
: Capital Structure and Profitability: S&P 500 Enterprises in the Light of the 2008 Financial Crisis
: Diplomica Verlag GmbH
: 9783836645478
: 1
: CHF 29.30
:
: Allgemeines, Lexika
: English
: 126
: kein Kopierschutz/DRM
: PC/MAC/eReader/Tablet
: PDF
The present study aims to investigate to what extent capital structure has an impact on profitability and closely associated factors due to a series of bankruptcies and bail-outs within the last twelve months. The analysis refers to firms listed in the S&P 500 index on January 2004 and evaluates their performance from 2004 to 2008. The results show strong industry-specific characteristics for all factors observed, i.e. gearing, profitability, liquidity, investments and dividends. In addition, findings indicate a negative effect of higher gearing for almost all ten sectors in respect of the core variables analysed. Neither the trade-off nor the pecking order theory can be confirmed, however, more support for the former is found. Due to the complexity of capital structure choice, regulations have very limited effects that require the need for independent non-governmental monitoring agencies to improve transparency and have the authority to intervene if managers act at the expense of public interest.
Contents List3
Abbreviations5
1 Introduction7
1.1 General Definition and Justification of Issues and Objectives7
1.2 Research Questions and Methodology9
1.3 Overview and Organisation of Chapters10
2 Existing Theories and their Predictions13
2.1 Existing Theories13
2.1.1 The Trade-Off Theory16
2.1.2 The Pecking Order Theory19
2.2 Predictions of Existing Theories22
2.2.1 Capital Structure and Industry22
2.2.2 Capital Structure and Profitability26
2.2.3 Capital Structure and Liquidity28
2.2.4 Capital Structure, R28
2928
2.2.5 Capital Structure and Dividend Policy32
2.3 A Final Comment34
3 Methodology35
3.1 Data Sampling35
3.2 Data Collection36
3.2.1 Missing Values and Adjustments37
3.3 Variables and their Definitions38
3.3.1 Leverage and Gearing38
3.3.2 Profits and Return40
3.4 Hypotheses and Hypotheses Testing40
3.4.1 H1: Capital Structure and Industry41
3.4.2 H2: Capital Structure and Profitability42
3.4.3 H3, H4 and H5: Capital Structure, Liquidity, R42
4342
4 Findings and Analysis45
4.1 H1: The Impact of Industry on Capital Structure and Associated Variables45
4.2 H2: The Existence of a Correlation Between Leverage and ROCE55
4.3 H3: The Existence of a Correlation Between Leverage and Liquidity60
4.4 H4: The Existence of a Correlation Between Leverage and R60
6360
4.5 H5: The Existence of a Correlation Between Leverage and Dividends67
5 Conclusions72
5.1 Capital Structure72
5.2 Profitability73
5.3 Liquidity74
5.4 Investments74
5.5 Dividends75
6 Recommendations77
7 Reflections81
7.1 Objectives81
7.2 Strengths81
7.3 Weaknesses and Limitations82
Bibliography84
Appendix91
Autorenprofil125