Walidacja modeli struktury kapitału w świetle teorii kompromisu na przykładzie spółek z indeksu S&P 500
Validation of Capital Structure Models in the Light of Trade-off Theory as Exemplified by the S&P 500 Companies

Summary/Abstract: The aim of this study is to empirically analyse the factors affecting the capital structure of companies listed in the S&P 500 Index. The relationships are analysed with the trade-off theory, which takes financial risk into account. Capital structure plays a key role in operations of every company and affects its market value, economic performance and investment profitability. The choice of the proportion between equity and debt capital is a crucial element of financial policy, determining operational flexibility and the level of financial risk. The study is based on extended data analysis, comparing the assumptions made in the article by Oktavina et al. [Oktavina, Manalu, Yuniarti, 2018, pp. 73-82] covering the years 2012-2016 with the results obtained for a longer period including recent years and periods of greater turbulence in financial markets. The paper consists of five sections which discuss theoretical models of capital structure, corporate risk, financial ratio analysis, linear regression to find the determinants of the Debt to Equity Ratio (DER) and the summary of results. The study findings allow for a clear assessment of the lack of generalisability of previous findings and even point to methodological errors committed by the authors of the cited article. The conclusions, which indicate the lack of universal regularities in shaping corporate capital structure, accounting for the adopted range of variables, constitute the study primary value added. They also motivate further analysis in this area and outline potential directions for future research.

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