Capital Structure and Sources of Funds with particular reference to Portuguese Industrial Companies

Abstract

To test the static trade-off theory and the pecking order theory in the publicly traded Portuguese industrial companies is the essential purpose of this project. By testing these two of the most important theories of capital structure, we will be able to better understand which criteria financial managers of these companies follow when they have to make financing decisions. This dissertation comprises four different parts. The first one includes the two first chapters: the chapter of introduction – where the general ideas about the project can be found – and the chapter addressing the methodology used. The second part constitutes the theoretical approach, including the chapter where the review of the relevant literature is addressed. The third part includes the chapter where the results of the field research are exposed. Finally, the fourth part includes the chapter where the conclusions reached by comparing the two theories analyzed in the second part with the results exposed in the third part are addressed, and also includes a checklist of factors managers should take into account when they face financing decisions.