Apresentação

ID: 4184

Authors: Walter Bataglia.

Source: Revista de Administração Mackenzie, v. 10, n. 6, p. 1-1, November-December, 2009. 1 page(s).

Document type: Editorial (Portuguese)

Introdução V. 10 N. 6

ID: 4185

Authors: Karim Cristina de Sousa Ribeiro, Aureliano Angel Bressan.

Source: Revista de Administração Mackenzie, v. 10, n. 6, p. 2-3, November-December, 2009. 2 page(s).

Document type: Article (Portuguese)

Are leverage and debt maturity complements or substitutes? Evidence from Latin America

ID: 4186

Authors: Paulo Renato Soares Terra.

Source: Revista de Administração Mackenzie, v. 10, n. 6, p. 4-24, November-December, 2009. 21 page(s).

Keyword: Capital structure , Debt maturity , Dynamic panel data analysis , Latin America , Trade-off

Document type: Article (English) Show Abstract

The aim of this paper is to investigate the choice between debt and equity simultaneously with the decision between short- and long-term debt for a large sample of emerging markets from Latin America. In order to do this, we test a model (BARCLAY; MARX; SMITH JR., 2003) of joint capital structure and debt maturity determination for a sample of 986 firms from Latin America in the period 1990-2002, employing the Generalized Method of Moments on a system of equations. The empirical results support three main findings. First, capital structure and debt maturity are financial policy complements in Latin America. Second, there is a substantial dynamic component in the determination of debt maturity that has been neglected by previous research. Finally, firms face moderate adjustment costs towards their optimal maturity. Results are robust to variation in sample composition in terms or countries, industries, and years.

Income smoothing, cost of debt capital and capital structure in Brazil

ID: 4187

Authors: Miguel Angel Rivera Castro, Antonio Lopo Martinez.

Source: Revista de Administração Mackenzie, v. 10, n. 6, p. 25-46, November-December, 2009. 22 page(s).

Keyword: Capital structure , Cost of debt capital , Earnings management , Income smoothing , Net income

Document type: Article (Portuguese) Show Abstract

In this paper using a sample of Brazilian companies and models proposed by Eckel (1981) and Leuz, Nanda, and Wysocki (2003) as empirical proxies to measure income smoothing, test results indicate that companies that promote income smoothing are likely to have a lower cost of capital and a capital structure with greater percentage of long-term debt. The methodology used included a panel data Nerlove type for a period from 2003 to 2007. The analysis lagged in one and two periods reveals that smoothing will impact on future cost of capital and the capital structure. Results after controlling heterogeneity and factors known to explain the cost of capital and capital structure proved to be robust, indicating the significance of income smoothing with respect to alternative explanatory variables. The influence of smoothing factor in one and two years delayed have comparable magnitude to other factors such as size and risk. The results support the notion that income smoothing in Brazil is an information-signaling mechanism, with implications for the cost of capital and the financing decisions.

Determinants of capital structure of publicly-traded companies in Latin America: an empirical study considering macroeconomic and institutional factors

ID: 4188

Authors: Douglas Dias Bastos, Wilson Toshiro Nakamura, Leonardo Fernando Cruz Basso.

Source: Revista de Administração Mackenzie, v. 10, n. 6, p. 47-77, November-December, 2009. 31 page(s).

Keyword: Capital structure , Firm-specific factors , Latin America , Macroeconomic and institutional factors , Panel data

Document type: Article (Portuguese) Show Abstract

Recent researches have been evidenced that specific country factors, as legal, institutional and economical environments influence the capital structure of the companies. The present study investigates the determinants of capital structure using panel data, for a sample of 388 companies belonging to the seven larger economies of Latin America (Mexico, Brazil, Argentina, Chile and Peru), in the period 2001-2006. Starting from six indicators of leverage ratio, it was evidenced that the firm-specific factors: current liquidity, profitability, market to book value and size, present the most significant results. The theory of pecking order seems to be the one that best explains the obtained results. The results for macroeconomic and institutional factors were not so robust, but for the variable GDP growth, and at a lower degree for proxies about the relevance of the stock market, fiscal load and time of opening of a new business.

Capital structure and windows of opportunities: tests in the Brazilian market

ID: 4189

Authors: Eduardo Alexandre Mendes, Leonardo Fernando Cruz Basso, Eduardo Kazuo Kayo.

Source: Revista de Administração Mackenzie, v. 10, n. 6, p. 78-100, November-December, 2009. 23 page(s).

Keyword: Capital structure , Equity market timing , Initial public offerings , Leverage , Value Creation

Document type: Article (Portuguese) Show Abstract

This study tests the market timing theory (EMTT) in the Brazilian Stock Market. The study is an adaptation from the Baker and Wurgler’s article (2002) that successfully tested this theory in the American Stock Market. The theory has not been proven in the Brazilian Market. The leverage decreased in the first year after the initial public offerings (IPO), but it grew once again without presenting the persistency required to corroborate the theory.

Market value calculation and the solution of circularity between value and the Weighted Average Cost of Capital (Wacc)

ID: 4190

Authors: Ignacio Vélez-Pareja, Joseph Tham.

Source: Revista de Administração Mackenzie, v. 10, n. 6, p. 101-131, November-December, 2009. 31 page(s).

Keyword: Capital budgeting , Equity cost of capital , Firm valuation , Market value , Weighted average cost of capital

Document type: Article (English) Show Abstract

Most finance textbooks present the Weighted Average Cost of Capital (WACC) calculation as: WACC = Kd×(1-T)×D% + Ke×E%, where Kd is the cost of debt before taxes, T is the tax rate, D% is the percentage of debt on total value, Ke is the cost of equity and E% is the percentage of equity on total value. All of them precise (but not with enough emphasis) that the values to calculate D% y E% are market values. Although they devote special space and thought to calculate Kd and Ke, little effort is made to the correct calculation of market values. This means that there are several points that are not sufficiently dealt with: Market values, location in time, occurrence of tax payments, WACC changes in time and the circularity in calculating WACC. The purpose of this note is to clear up these ideas, solve the circularity problem and emphasize in some ideas that usually are looked over. Also, some suggestions are presented on how to calculate, or estimate, the equity cost of capital.

Study of Trade-Off and Pecking Order models on indebtedness and Payout variables in Brazilian companies (2000-2006)

ID: 4191

Authors: Marcelino David, Wilson Toshiro Nakamura, Douglas Dias Bastos.

Source: Revista de Administração Mackenzie, v. 10, n. 6, p. 132-153, November-December, 2009. 22 page(s).

Keyword: Indebtedness , Payout , Pecking order , Structure of capital , Trade-off

Document type: Article (Portuguese) Show Abstract

This study has as reference the works by Fama and French (2002) accomplished with data of North American companies and by Brito and Silva (2003) accomplished with data of Brazilian companies. This work tested the forecasts of the tradeoff and pecking order theories on indebtedness and payout, using the methodology by Fama and McBeth (1973). The results demonstrated that Brazilian companies increased the remuneration goal, however they still distribute a small proportion of the profits, if compared to the American pattern, in spite of the Brazilian legislation to be quite favorable. The results indicate that the payout is negatively related with the investment opportunities and that the dividends don’t suffer variation of short period to accommodate the investments, as it defends the theory of the pecking order. The profitability demonstrated to be relevant in the determination of the indebtedness politics, what indicates that the most profitable companies are less indebted confirming the pecking order. Besides, the variable “size” demonstrated to be significant in the indebted politics, corroborating pecking order and trade-off theories.