Optimal kapitalstruktur: En undersökning tillämpad på skandinaviska och tyska företag
Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
This paper describes and develops a trade off model of optimal capital structure by Bradley et al. (1984). The model is then tested to examine how changes in corporate tax rates affect the optimal capital structure of firms. Based on theoretical implications of the model, four hypotheses are derived stating that firms’ optimal debt-to-value ratio is (1) negatively related to financial distress costs, (2) negatively related to non-debt tax shields, (3) negatively related to firm volatility and (4) positively related to the corporate tax rate. Based on the results of two regression models applied on 753 Scandinavian and German firms, we find empirical support for hypothesis 1 and 3 while we find no empirical support for hypothesis 2 and 4. These results can be explained by problematic empirical proxies and in the light of the pecking-order theory.
Place, publisher, year, edition, pages
2011. , 41 p.
Agency costs, Financial distress costs, Firm volatility, Germany, Interest tax shields, Non-debt tax shields, Optimal capital structure, Pecking-order theory, Statutory corporate tax rates, Scandinavia, Trade off theory
IdentifiersURN: urn:nbn:se:uu:diva-156767OAI: oai:DiVA.org:uu-156767DiVA: diva2:433245
Subject / course
UppsokSocial and Behavioural Science, Law
Södersten, Jan, Professor
Ohlsson, Henry, Professor