Digital library of construction informatics and information technology in civil engineering and construction
Digital library
Paper: eres2012_197
| Paper title: | Capital structure and European property companies |
| Authors: | Andrew Baum, Colin Lizieri and Jamie Alcock |
| Summary: | The broad aim of this research is to develop a better understanding of the capital structure practices and processes of European real estate companies. The emphasis is on internal processes and the firms’ rationale for particular decision making behaviour. By capital structure processes and practices, we mean the ways by which firms obtain capital for projects and activities. Broadly, this includes decisions about debt versus equity, use of internally generated capital, decisions about debt maturity profile and seasoned equity issuance. In turn, such decisions affect the required returns for stakeholders: the required cost of equity, the marginal cost of debt, tax impacts, dividend policy; and, again in turn, these feed into required returns discount rates, target rates of return, hurdle rates - for project appraisal. There are, thus, interactions between capital structure decisions and capital budgeting decisions. The primary motivation for the research relates to apparent discontinuities between the capital structure decisions expected from the models of financial theory; observed market practice on capital structure; and the reported decision-making processes and views of market participants. The research is intended to explore any differences in expected, observed and reported practices and to seek to reconcile or explain those differences. A secondary motivation is to explore the extent that market practices and manager attitudes change over the cycle: are property company managers simply reactive or are there defined and consistent strategies that give rise to changes conditional on the market environment? |
| Type: | normal paper |
| Year of publication: | 2012 |
| Series: | ERES:conference |
| Download paper: | |
| Citation: | Andrew Baum, Colin Lizieri and Jamie Alcock (2012). Capital structure and European property companies. 19th Annual European Real Estate Society Conference in Edinburgh, Scotland, http://itc.scix.net/paper/eres2012_197 |
hosted by University of Ljubljana
includes:
W78
includes:
W78
inspired by SciX, ported by Robert Klinc [2019]