By surveying 11 German companies, this study attempted to analyze key determinants of capital structure and financing decisions within the scope of theories and concepts taken from the current body of literature.
The companies in the sample are particularly concerned about the potential costs of bankruptcy, debt levels of similar firms, the inherent business risk, the sufficiency of internal funds and the tangibility of assets when issuing debt. When issuing equity the target debt-to-equity ratio, the negative share price reactions upon announcement and the availability of alternative sources of finance are taken into account