Capital Structure in the Energy Sector - A study of Swedish energy companies

Capital structure and the effect that certain factors have on it has been discussed and researched for a long time. The study of capital structure concerns a company’s way of financing and the relationship between equity and debt. Research conducted in different countries has resulted in both similar and different results. This study focuses on the capital structure of companies active in the Swedish energy sector and researches the presence of traditional economic theories among these companies. The economic theories regarding capital structure that have been chosen to investigate are Trade-Off Theory, Pecking Order Theory and Agency Cost Theory. Based on these theories, explanatory variables have been chosen and a regression model has been constructed in order to find evidence for these models among the chosen companies. The conclusions that could be drawn from the result was that the study finds partial evidence for Trade-Off Theory and Agency Cost Theory but most evidence for Pecking Order Theory