This master thesis examines the fact that many firms have a lower debt than would be expected, according to some pricing models of the capital structure literature (Minton and Wruck, 1991; Strebulaev and Yang, 2007) and therefore, it is intended to find empirical confirmation for the case of unlisted Portuguese companies in the footwear manufacturing sector, for the period from 2006 to 2015. In this context, there are essentially two theoretical models that explain the capital structure: the trade-off model, which identifies the marginal advantages and disadvantages of borrowing as determinants of the capital structure, and the pecking order model, which considers that financing decisions are made incrementally without reference to the initial capital stock. On the other hand, it is distinguished and compared the companies without indebtedness, which in this paper are considered to be companies that hold between 0% and 1% of financial debt (Zero Leverage Firms), companies with low indebtedness, companies that in average are below 10% of financial debt (Low Leverage Firms), and the remaining companies, with an average debt above 20%. The factors considered as determinants of the choice of the companies between debt and equity were the dimension, tangibility, profitability, growth, non-financial tax benefits, risk and the effective tax rate (Titan and Wessels, 1988; and Zingales, 1995). The obtained results suggest that the zero leverage firms and low leverage firms base the debt decisions on the explanatory variables tangibility and profitability. It should also be noted that the trade-off theory seems to be more consistent to explain the indebtedness in the Portuguese companies of the footwear manufacturing sector.
Date of Award | 17 Jul 2017 |
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Original language | Portuguese |
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Awarding Institution | - Universidade Católica Portuguesa
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Supervisor | Luis Pacheco (Supervisor) |
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- Zero leverage firms
- Low leverage firms
- Trade-off
- Pecking order
- Capital structure
- Mestrado em Auditoria e Fiscalidade
Decisão de endividamento no setor da fabricação do calçado: análise de empresas sem dívida e com reduzida dívida
Silva, C. F. G. D. (Student). 17 Jul 2017
Student thesis: Master's Thesis