The effect of firm-specific factors on leverage ratios in seasoned equity offerings: BIST application

It has been included in many studies on the capital structure of which resources the firms will turn to in the face of their fund needs with the target of minimum cost and the maximum of firms value, which resource to turn to, how to create the optimal capital structure for the firms. The main purpose of this study is to evaluate the changes in the capital structure of firms after seasoned equity offerings by testing the effect of firm-specific factors on leverage ratios. Studies on seasoned public offering practices in Turkey are quite low. For this purpose, the international literature on the subject has been extensively researched. In this study, the effect of firm-specific factors on leverage ratios are tested in seasoned equity offerings. In this context, the data of 41 firms traded in the BIST All Index were used, by using annual data between the period of 2005 and 2020. The firms are the firms operating in the manufacturing industry. As leverage ratios, the short term of debt to equity ratio, the long term of debt to equity ratio, the total of debt to equity ratio were used as dependent variables and 3 different models were established. In 3 different models in which leverage ratios were determined as dependent variables and the firm-specific factors as independent variables, 10 basic hypotheses were put forward and the relationship between the variables were examined by panel data analysis method. The findings of the study were found to be compatible with modern capital structure theories. According to the results, while the market capitalization of a publicly traded and the short term of debt to equity ratio have a positive relationship; the short term of debt to equity ratio and fixed assets/total assets, liquidity ratio, the density of public offering have a negative relationship. While the density of public offering and the market capitalization of a publicly traded have a negative relationship on the long term debt to equity ratio; an asset's growth rate, market value/book value, fixed asset/asset total, the growth rate of net sales, tax reduction have a positive relationship. While the return on equity, liquidity ratio and the growth rate of equity have a negative relationship on the total of debt to equity ratio; the market capitalization of a publicly traded and the growth rate of net sales have a positive relationship.