Boeing: surviving business turbulence after black swan cataclysms

Theoretical basis Capital structure theory. Research methodology The case is meant for teaching and class discussion, and uses only secondary data based on published sources. The interpretation and perspectives presented are based solely on the secondary data. Case overview/synopsis This paper aims to help current and future managers understand capital structure theory and the various equity and debt finance options available for raising capital. It also examines the financial analysis and strategic management of black swan events. After the class discussion, students will understand how to financially and strategically manage a company during black swan events and also have a deep dive into capital structure analysis of a large company. Complexity academic level MBA/postgraduate/undergraduate courses on corporate finance or advanced corporate finance. Executive/management development programs and short duration Massive Open Online Courses on investment decision-making and advanced corporate finance. MBA/postgraduate/undergraduate courses on corporate strategy and economic environment and planning.

A RETROSPECTIVE LOOK AT “THE HAYEK STORY”: ROUNDABOUTNESS, STICKY CONSUMPTION, AND SEQUESTERED CAPITAL

Friedrich Hayek’s business cycle theory withered throughout the 1930s as he admitted that its underlying model of Böhm-Bawerkian roundaboutness was incomplete and inadequate. In 1934, Hayek started a two-volume book on capital theory, completing only one volume in 1941. Curiously, Hayek ([1941] 2009) cites John Hicks’s (1939) Value and Capital but not the financial measure of roundaboutness that Hicks suggested as a substitute for Böhm-Bawerkian roundaboutness. In 1967, in “The Hayek Story,” Hicks criticized the inexplicable lags. Hayek maintained his view that consumption was sticky and responded to Hicks with a mound-of-honey analogy. Nevertheless, Hayek maintained that his business cycle theory was fundamentally correct and continued to hope that others might someday discover a capital structure theory to undergird it. Toward fulfilling Hayek’s hope, we suggest augmenting the canonical stages of production with a sequestered-capital stage where products are invented, productized, and inventoried prior to launch, uncoordinated by observable prices.

Does financing behavior of SME entrepreneurs of Bangladesh follow capital structure theory?-an investigation into Pecking Order Theory

This study attempts to investigate whether the financing preferences of small and medium enterprises (SMEs)’ entrepreneurs of Bangladesh follow capital structure theory by investigating into Pecking Order Theory (POT). For this study, cross-sectional primary data have been collected through questionnaire. The answers of the questions have been measured through five points Likert Scale. The scores were analyzed using mean score. To analyze the data, some descriptive statistics have been used. Besides, one sample one tail [Formula: see text]-test has been applied to test the hypotheses. The study finds that the entrepreneurs themselves do not believe that there is an information asymmetry in debt market. But their perception regarding debt market ascertained the presence of the information asymmetry between SME sector (entrepreneurs of SME) and the debt market (banks). The answers of respondents are statistically significant that they want to use the retained profits first, bank loan as second and want to issue external equity (taking partner/s) as a third option among these three alternatives of additional financing. This tendency of the respondents towards financing is consistent with POT. Therefore, Government policy for motivating SMEs to keep formal accounting should be introduced to reduce the information asymmetry in debt market along with taking proper initiatives to increase accessibility of SMEs to institutional credit.

TINGKAT KEUNTUNGAN DAN USIA PERUSAHAAN TERHADAP LEVERAGE: ESTIMASI MODEL DATA PANEL DI INDONESIA

This research have been found that profitability and firm age affect leverage. The selected objects is all companies which are listed in Indonesia Stock Exchange during period 2013-2017. We select the samples use the data panel regression model. There are 96 companies have been selected as samples whit technique purposive sampling. The result by partial test profitability and firm age, has a negative significant influence to the leverage, shows that the r-square value of 91,76% which means the profitability and age of the company have the ability to explain leverage of 91,76% and while remaining 8,24% is explained by other variables which are not studied. This is relevant to the capital structure theory. Capital structure is something that is very important for the company which involves funding that carries out the company's operations so that it produces profits. Another factor is the firm age, a long-standing and reputable company will be able to overcome creditworthiness issues when it decides to use debt funding sources.

A Retrospective Look at The Hayek Story: Roundaboutness, Sticky Consumption, and Sequestered Capital

Friedrich Hayek’s business cycle theory, withered throughout the 1930s as he admitted that its underlying model of Böhm-Bawerkian roundaboutness was incomplete and inadequate. In 1934, Hayek started a two-volume book on capital theory, completing only one volume in 1941. Curiously, Hayek (1941) cites Hicks’ (1939) Value and Capital but not the financial measure of roundaboutness that Hicks suggested as a substitute for Böhm-Bawerkian roundaboutness. In 1967, Hicks criticized the inexplicable lags in The Hayek Story. Hayek maintained his view that consumption was sticky and responded to Hicks with a mound-of-honey analogy. Nevertheless, Hayek maintained that his business cycle theory was fundamentally correct and continued to hope that others might someday discover a capital structure theory to undergird it. Toward fulfilling Hayek’s hope, we suggest augmenting the canonical stages of production with a sequestered-capital stage where products are invented, productized, and inventoried prior to launch, uncoordinated by observable prices.

Can the SOM Analysis Predict Business Failure Using Capital Structure Theory? Evidence from the Subprime Crisis in Spain

The paper aims to identify which variables related to capital structure theory predict business failure in the Spanish construction sector during the subprime crisis. An artificial neural network (ANN) approach based on Self-Organizing Maps (SOM) is proposed, which allows one to cluster between default and active firms’ groups. The similarities and differences between the main features in each group determine the variables that explain the capacities of failure of the analyzed firms. The network tests whether the factors that explain leverage, such as profitability, growth opportunities, size of the company, risk, asset structure, and age of the firm, can be suitable to predict business failure. The sample is formed by 152 construction firms (76 default and 76 active) in the Spanish market. The results show that the SOM correctly predicts 97.4% of firms in the construction sector and classifies the firms in five groups with clear similarities inside the clusters. The study proves the suitability of the SOM for predicting business bankruptcy situations using variables related to capital structure theory and financial crises.

Analisis Capital Structure dalam Keuangan Islam

This paper studies the current development of the capital structure theory, to explore the connection between this theory and the Islamic finance, and to investigate the connection between the capital structure and the process of syari`ah (Islamic law) screening in three stock exchanges of syari`ah. Here, this article employs a qualitative approach by delving other scholars’ theories that have studied the capital structure of the Islamic finance. Next, this paper demontates an important finding; that is, limitation is necessary for the use of debt in a company that operates on the basis of Islamic principles. In this regard, as a debt has to have a favor for asset, the company, which operates on the basis of Islamic principles, is not to go beyond the real asset. The difference of the syari`ah screening model in those three stock exchanges is influenced by some crucial factors in the way the company decides its syari`ah screening model. They are, such as the difference of a social structure in a country, its modification of the monetary industry, and its variance of the school of thought adhered by some Muslim learned people.