Original Research

Capital structure decisions: The views of investment advisors

Fani Titi, Merle Sandler, Mike Ward
South African Journal of Business Management | Vol 26, No 2 | a824 | DOI: https://doi.org/10.4102/sajbm.v26i2.824 | © 2018 Fani Titi, Merle Sandler, Mike Ward | This work is licensed under CC Attribution 4.0
Submitted: 15 October 2018 | Published: 30 June 1995

About the author(s)

Fani Titi, Graduate School of Business Administration, University of the Witwatersrand, South Africa
Merle Sandler, Graduate School of Business Administration, University of the Witwatersrand, South Africa
Mike Ward, Graduate School of Business Administration, University of the Witwatersrand, South Africa

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Abstract

In this research a survey was used to gain insight into the factors that affect the choice of capital structure, from the perspective of investment advisors. Content analysis of responses to open-ended questions in the questionnaire and interviews showed a clear support for the optimal capital structure theory and indicated theory-based approaches to the choice between different financing instruments. Factor analysis showed that taxation implications, market concerns and financing costs affect capital structure decisions. The results indicate that asymmetric information and signalling are important concerns but provide little evidence regarding the importance of agency considerations.

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