Capital Structure and Corporate Spin-offs
Author | : Niki Schuler |
Publisher | : |
Total Pages | : |
Release | : 2013 |
ISBN-10 | : OCLC:852653549 |
ISBN-13 | : |
Rating | : 4/5 ( Downloads) |
Download or read book Capital Structure and Corporate Spin-offs written by Niki Schuler and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The following thesis tries to take benefit of the unique setting of a corporate spin-off transaction in order to investigate capital structure determinants. The study reveals evidence that companies involved in a European spin-off transaction allocate financial leverage ratios according to the pecking order theory. Profitability of post-spin-off companies affects financial leverage ratios negatively. Growth, lower financial distress costs and the size of a company influences the financial leverage ratio positively. No relation is observed between non-debt tax shield and financial leverage. Even though post-spin-off companies emerging from the spin-off transaction with lower leverages are associated with higher business risk, no evidence is found that risk influences financial leverage ratios.