Capital Structure as a Determinant of Growth Opportunities in Brazilian Companies

#GrowthOpportunities #Market-to-book #Tobin'sQ

Arthur Frederico Lerner and Leonardo Flach

A variety of empirical studies tried to explain the determinants of the capital structure of organizations. This research aims to analyze how the way a company indebted itself influences its opportunities to grow. The data collected refer to companies listed on [B]3, considering the period from 2008 to 2020. It will be used multiple regression, using panel data with a stacked time series, with growth opportunities as the dependent variable, measured using the Market-to-book (MB) and Tobin's Q (Q) index, and as independent variables, Debt, Size, Return on Assets (ROA), Revenue Growth and Capital Expenditure (CAPEX). The Market-to-book model was better explained than Tobin's Q model by the chosen variables. In both models, indebtedness and ROA were the variables with greater sensitivity to growth opportunities. Indebted companies presented better growth opportunities. ... https://www.youtube.com/watch?v=nrYpcv4Qva0