May 2011
Intermediate to advanced
502 pages
20h 1m
English
book
Capital Structure and Corporate Financing Decisions: Theory, Evidence, and Practice
by H. Kent Baker, Gerald S. Martin
Content preview from Capital Structure and Corporate Financing Decisions: Theory, Evidence, and Practice
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JWBT436-c07 JWBT436-Baker March 4, 2011 7:20 Printer Name: Hamilton
116 The Elements of Capital Structure
Exhibit 7.2 Financing Patterns across Countries with Different Legal Systems
Panel A. Common-Size Balance Sheet Civil Common Differences
Current assets 0.483 0.451 0.032
∗∗
Net property, plant, and equipment 0.355 0.376 −0.021
∗∗
Other assets 0.162 0.179 −0.017
∗
Current liabilities 0.298 0.261 0.037
∗∗
Short-term debt 0.144 0.090 0.055
∗∗
Long-term debt 0.131 0.173 −0.042
∗∗
Total debt 0.275 0.263 0.012
∗∗
Other liabilities 0.026 0.054 −0.028
∗
Stockholders’ equity 0.401 0.428 −0.027
∗∗
Panel B. Corporate Cash Flows Civil Common Differences
Investments 0.066 0.083 −0.017
∗∗
Cash dividends 0.011 0.016 −0.005
∗
Change in working capital 0.005 0.004 0.001
Internal cash flow 0.060 0.036 0.024
∗∗
Financing deficit (surplus) 0.023 0.067 −0.045
∗∗
Net equity issued/Total assets 0.011 0.058 −0.047
∗∗
Net debt issued/Total assets 0.012 0.010 0.002
Long-term debt issued/Total debt issued 0.458 0.627 −0.170
∗∗
Note: The sample consists of all nonfinancial firms listed on WorldScope database during the period
1990 to 2004. The value of each balance-sheet item is calculated as a percentage of the book value of
total assets. Other assets are defined as investments and advances + intangibles. Current liabilities
exclude short-term debt. Other liabilities are defined as deferred taxes + minority interest. The value ...
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