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Capital Structure of Internet Companies: Case Study

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  • Miglo, Anton
  • Liang, Shuting
  • Lee, Zhenting

Abstract

We analyze the financing decisions and capital structure of internet companies and relate observed findings to the common capital structure theories. Large internet companies usually have low debt and small internet companies have high debt. We find that the trade-off theory of capital structure, pecking order theory, market timing theory and other theories cannot individually explain a firm’s capital structure. However, they can compliment each other in describing some patterns of observed behavior. We also suggest a number of recommendations for capital structure theory and practice.

Suggested Citation

  • Miglo, Anton & Liang, Shuting & Lee, Zhenting, 2014. "Capital Structure of Internet Companies: Case Study," MPRA Paper 56330, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:56330
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    More about this item

    Keywords

    capital structure; internet companies; financing strategy; sources of financing;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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