We survey 79 private equity (PE) investors with combined assets under management of more than $750 billion about their practices in firm valuation, capital structure, governance, and value creation. Investors rely primarily on internal rates of return and multiples to evaluate investments. Their...

In their study “The cost of capital, corporation finance and the theory of investment” (1958) laureates of Nobel Price Nobel Franco Modigliani and Merton Miller represent what could possibly be the most important theory for the structure of capital, through which they explain the effect of...

So far, the capital structure of Indian small and medium scale enterprises has been typical. There have been constraints on the amount of total funds that can be raised including equity the owners can privately raise. Funding has come mainly from banks or owned funds. The long term debt has been...

This dissertation suggests that the tax savings, in firm valuation, are discounted at a rate computed through a model presented in the literature review, which is different from the rates usually used for this purpose either by the top text books from, for example, Neves (2002), Ross,...

Leveraged buyouts allow for a separate identification of sponsor reputation and underlying firm quality and their effects on capital structure choices. In 616 U.S. LBOs for which we can reconstruct financing activity, we find that the average LBO issues an average of 1.16 additional debt...

This paper examines the impact of having an Environmental, Social, and Governance (ESG) rating on a firm’s debt structure, i.e. how firms change their leverage ratios and debt components when becoming ESG rated. Targeted market and book leverage ratios are reduced when firms become ESG rated....

We investigate the level and volatility effects of real exchange rates on the productivity growth of manufacturing firms with heterogeneous access to debt, and domestic and foreign equity markets in Turkey. We find that while exchange rate volatility affects productivity growth negatively,...

Using a simple theoretical model, this paper argues that an increase in foreign presence, which refers to the level of foreign investment in a given domestic firm, can affect the leverage of domestic firms. We apply the model to explore the link between foreign presence and leverage with firm...

This paper investigates the interactions between preemptive competition and leverage in a duopoly market. We investigate both a case in which the firms have optimal financial structures, and a case in which financing constraints require firms to finance their investments by debt. Our findings...

We survey 290 LATAM firms on capital budgeting, cost of capital and capital structure issues. We analyze the results and compare them to those of other studies. We interpret differences according to special features characterizing both emerging markets and SME. We observe that LATAM firms make...