Capital Structure - Theory and the Czech Practice
|Author:||Mgr. Michal Palata|
|Year:||2004 - summer|
|Leaders:|| prof. Ing. Michal Mejstřík CSc.
|Work type:|| Finance and Banking
|Awards and prizes:||M.A. with distinction from the Dean of the Faculty of Social Sciences for an extraordinarily good masters diploma thesis|
|Abstract:||The thesis examines the validity and applicability of concepts and pieces of knowledge of four capital structure theories in the institutional environment of the Czech Republic. In its theoretical part it presents the trade-off, signaling, pecking order, and agency theories, as well as possible ways of their testing. These are then employed in the practical part, which consists of an equity-oriented discussion of the economic and legal environment for financing of Czech-based companies, and a sector-level and company-level analyses of the capital structure of Czech joint-stock companies.
The conditions on the capital and venture capital markets, as well as the legal imperfections, are found to be rather unfavorable for raising equity capital in the Czech Republic and point at the applicability of the pecking order hypothesis. Together with the results from the empirical analysis, however, it has to be stated that the findings of the thesis do neither explicitly support the argumentation of any of the theories, nor can any theory be rejected as entirely inapplicable with respect to the Czech environment.