4 Abstract Title Capital Structure – A study about Market Timing and its affects during a financial depression Seminar data 2013-05-29 Course FEKN90 Degree Project, Master of Science in Business and Economics, 30 ECTS Authors Amelie Persson and Robin Fransson Advisor Maria Gårdängen Keywords Capital Structure, Market Timing, Depression, Driving Factors, Debt Level, Nordic Market Purpose The purpose of this study is to empirically investigate how the relationship between Market Timing and Capital Structure changes during a depression compared to a booming economy. Methodology This study has a quantitative approach using panel data regression to investigate the connection between the Market Timing-hypothesis and the Capital Structure. This is done by researching certain variables that may affect a company’s Capital Structure. Theoretical perspective The theoretical framework is based on previous theories about Capital Structure, mainly covering the Trade-off theory, the Pecking order theory and the Market Timing theory as well as previous studies on this topic. Empirical framework A sample containing 247 listed firms on the Danish, Finnish and Swedish exchange markets during 2003-2011. Conclusions The findings of this study shows that there is a relationship between Capital Structure and Market Timing covering the entire survey period. The explanatory variables of this study had a larger impact on Capital Structure before the depression, which indicates that other variables affect during the depression. Furthermore the results of this study cannot conclude that historical M/Bs have a permanent affect on the companies Capital Structure
