Corporate financing decisions: UK survey evidence

Despite theoretical developments in recent years, our understanding of corporate capital structure remains incomplete. Prior empirical research has been dominated by archival regression studies which are limited in their ability to fully reflect the diversity found in practice. The present paper reports on a comprehensive survey of corporate financing decision-making in UK listed companies. A key finding is that firms are heterogeneous in their capital structure policies. About half of the firms seek to maintain a target debt level, consistent with trade-off theory, but 60 per cent claim to follow a financing hierarchy, consistent with pecking order theory. These two theories are not viewed by respondents as either mutually exclusive or exhaustive. Many of the theoretical determinants of debt levels are widely accepted by respondents, in particular the importance of interest tax shield, financial distress, agency costs and also, at least implicitly, information asymmetry. Results also indicate that cross-country institutional differences have a significant impact on financial decisions

The Gaia-ESO survey : Processing FLAMES-UVES spectra

Date of Acceptance: 19/03/2014The Gaia-ESO Survey is a large public spectroscopic survey that aims to derive radial velocities and fundamental parameters of about 105 Milky Way stars in the field and in clusters. Observations are carried out with the multi-object optical spectrograph FLAMES, using simultaneously the medium-resolution (R ~ 20 000) GIRAFFE spectrograph and the high-resolution (R ~ 47 000) UVES spectrograph. In this paper we describe the methods and the software used for the data reduction, the derivation of the radial velocities, and the quality control of the FLAMES-UVES spectra. Data reduction has been performed using a workflow specifically developed for this project. This workflow runs the ESO public pipeline optimizing the data reduction for the Gaia-ESO Survey, automatically performs sky subtraction, barycentric correction and normalisation, and calculates radial velocities and a first guess of the rotational velocities. The quality control is performed using the output parameters from the ESO pipeline, by a visual inspection of the spectra and by the analysis of the signal-to-noise ratio of the spectra. Using the observations of the first 18 months, specifically targets observed multiple times at different epochs, stars observed with both GIRAFFE and UVES, and observations of radial velocity standards, we estimated the precision and the accuracy of the radial velocities. The statistical error on the radial velocities is σ ~ 0.4 km s-1 and is mainly due to uncertainties in the zero point of the wavelength calibration. However, we found a systematic bias with respect to the GIRAFFE spectra (~0.9 km s-1) and to the radial velocities of the standard stars (~0.5 km s-1) retrieved from the literature. This bias will be corrected in the future data releases, when a common zero point for all the set-ups and instruments used for the survey is be established.Peer reviewe

The short term debt vs. long term debt puzzle: a model for the optimal mix

This paper argues that the existing finance literature is inadequate with respect to its coverage of capital structure of small and medium sized enterprises (SMEs). In particular it is argued that the cost of equity (being both conceptually ill defined and empirically non quantifiable) is not applicable to the capital structure decisions for a large proportion of SMEs and the optimal capital structure depends only on the mix of short and long term debt. The paper then presents a model, developed by practitioners for optimising the debt mix and demonstrates its practical application using an Italian firm's debt structure as a case study

RED SUPERGIANTS AS COSMIC ABUNDANCE PROBES: THE MAGELLANIC CLOUDS

Red Supergiants (RSGs) are cool (∼ 4000K), highly luminous stars (L ∼ 105L⊙), and are among the brightest near-infrared (NIR) sources in star-forming galaxies. This makes them powerful probes of the properties of their host galaxies, such as kinematics and chemical abundances. We have developed a technique whereby metallicities of RSGs may be extracted from a narrow spectral window around 1μm from only moderate resolution data. The method is therefore extremely efficient, allowing stars at large distances to be studied, and so has tremendous potential for extragalactic abundance work. Here, we present an abundance study of the Large and Small Magellanic Clouds (LMC and SMC respectively) using samples of 9-10 RSGs in each. We find average abundances for the two galaxies of [Z]LMC = −0.37±0.14 and [Z]SMC = −0.53±0.16 (with respect to a Solar metallicity of Z⊙=0.012). These values are consistent with other studies of young stars in these galaxies, and though our result for the SMC may appear high it is consistent with recent studies of hot stars which find 0.5-0.8dex below Solar. Our best-fit temperatures are on the whole consistent with those from fits to the optical-infrared spectral energy distributions, which is remarkable considering the narrow spectral range being studied. Combined with our recent study of RSGs in the Galactic cluster Per OB1, these results indicate that this technique performs well over a range of metallicities, paving the way for forthcoming studies of more distant galaxies beyond the Local Group

Demographic transition and the real exchange rate in Australia: An empirical investigation

This article utilizes the empirical findings that age structure of the population affects saving, investment and capital flow and hypothesizes that age structure influences the real exchange rate. Based on this link, an empirical model is specified for Australia and estimated with annual data for the period 1970–2011. An autoregressive distributed lag model of cointegration indicates that Australia's real exchange rate is cointegrated with its productivity differential and the relative share of young dependents (0–14 years) in the population. Long-run estimates show that young cohort has an appreciating influence on the real exchange rate. Also, the short-run adjustment is substantial, with more than 65% of the disequilibrium corrected in a year