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The Determinants of the Capital Structure of Listed Australian Companies: The Financial Manager's Perspective
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D.E. Allen
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Abstract
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This paper reports the results of an investigation of financial manager's perceptions of the broad determinants of listed Australian company capital structure decisions. The research method involves a series of field interviews undertaken with the company secretaries and senior financial personnel of 48 listed Australian companies. The results are consistent with Donaldson's previously reported American findings, in that companies appear to follow pecking order with respect to funding sources and also report policies of maintaining spare debt capacity.
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Keywords
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CAPITAL STRUCTURE DETERMINANTS; FINANCIAL MANAGER'S PERSPECTIVES; PECKING ORDER HYPOTHESIS; SPARE DEBT CAPACITY.
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Contact Details
D.E. Allen
Department of Accounting and Finance
University of Western Australia
Nedlands WA 6009
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The author is grateful to the company secretaries and finance executives who very generously donated their time to participate in the survey and made the whole exercise possible. The author acknowledges the funding support provided by the Australian Research Grants Scheme and the Special Research Grants Scheme of the University of Western Australia. He thanks W. Black for his research assistance. He is grateful to P. Brown, H.Y. Izan, B. Howieson and anonymous reviewers for their comments; the faults remain his own.
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