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Cost-of-Capital in Managerial Finance pp 147–213Cite as

Primary Research: Company Survey

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Part of the book series: Contributions to Management Science ((MANAGEMENT SC.))

Abstract

In this chapter, the research design and findings of the company survey are presented. The main objectives of this chapter are to gain quantitative results of cost-of-capital practices for the focus population and to quantitatively test the influencing factors that were identified in the previous chapter.

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Notes

  1. 1.

    Often, the terminology “public” and “private” companies is used to denote whether a company’s shares are publicly dealt (see for instance Atrill and McLaney 2009; Miller and Jentz 2010). In this thesis, the terms “listed” and “non-listed” are preferred in order to avoid confusion with the public sector in the sense of companies being held by the government (Miller and Jentz 2010).

  2. 2.

    This thesis is written from the perspective of the Managerial Finance discipline. However, in German companies, the Management Accounting department is typically responsible for respective topics in practice.

  3. 3.

    Translation: International Association of Management Accountants. Website (in German): http://www.controllerverein.com

  4. 4.

    The listed companies could be filtered out, since stock market listing was a question in the questionnaire.

  5. 5.

    The data was collected using a questionnaire in German; the questionnaire in the appendix is a translated version.

  6. 6.

    http://www.surveymonkey.com

  7. 7.

    It has to be mentioned that the long data collection period is not expected to produce any error or bias, since the cost-of-capital practices that are examined are stable over a long period of time.

  8. 8.

    In order to protect the privacy of the companies, the exact revenues of the largest participants are not mentioned.

  9. 9.

    Calculated based on original metric scale data.

  10. 10.

    Based on recoded variables interpreting 4 and 5 of ordinal scale as “relevant”: see Sect. 7.2.6.1.

  11. 11.

    Based on recoded variables interpreting 4 and 5 of ordinal scale as “relevant”: see Sect. 7.2.6.1. Figures do not add up to 58 due to multiple selection possibilty and recoding/different measurement levels.

  12. 12.

    Please note that based on the values in Fig. 7.12, no meaningful comparison of listed and non-listed companies by absolute values is possible because the number of listed and non-listed companies in the sample is not equal. However, the relative importance of the individual methods per category of company can be compared.

  13. 13.

    In the figure, it can be seen that some non-listed companies also apply the CAPM. Although there is no stock market data available, they can use proxy methods to estimate the beta factor, as discussed in Chap. 2, Sect. 2.5.

  14. 14.

    In order to increase the comparability with previous studies, the percentage of companies using CAPM is related to listed companies only.

  15. 15.

    Subsequently referred to as business unit (BU) only.

  16. 16.

    Based on recoded variables interpreting 4 and 5 on an ordinal scale as “relevant”: see Sect. 7.2.6.1.

  17. 17.

    Based on recoded variables interpreting 4 and 5 of ordinal scale as “relevant”: see Sect. 7.2.6.1.

  18. 18.

    See also Sect. 3.3.1; percentages deviate between the section since Block’s figures shown in Sect. 3.3.1 are calculated based on a subset of respondents only while in this section, all respondents are used as a basis.

  19. 19.

    Agree = top two points of Likert type scale.

  20. 20.

    Based on recoded variables interpreting 4 and 5 of ordinal scale as relevant, see Sect. 7.2.6.1. Figures do not add up to total sample size due to multiple selection possibilty and recoding/different measurement level.

  21. 21.

    Based on recoded variables interpreting 4 and 5 on the ordinal scale as “relevant”: see Sect. 7.2.6.1.

  22. 22.

    That means that a “+” symbol indicates that the “yes” group has a higher median value of the ordinal variable.

  23. 23.

    Based on recoded variables interpreting 4 and 5 of ordinal scale as “relevant”: see Sect. 7.2.6.1.

  24. 24.

    Statistically, the significance of a relationship is influenced by the sample size (Easterby-Smith et al. 2012). As the sub-set of listed companies has a smaller sample size, this might also influence the number of significant relationships. For the purpose of this elaboration analysis, this effect is neglected.

  25. 25.

    The SPSS graphical user interface does not offer non-parametric partial correlation (partial rank correlation). In order to use partial rank correlation, the syntax has to be entered manually. The relevant commands can be found on the IBM website: http://www-01.ibm.com/support/docview.wss?uid=swg21474822

  26. 26.

    Please note that the number of significant relationships in the chart refers to correlations between ordinal variables only.

  27. 27.

    For the statistical reasons discussed in Sect. 7.6.2.3, the stock market listing factor could not be controlled for company size.

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  1. Stuttgart, Germany

    Dennis Schlegel

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Schlegel, D. (2015). Primary Research: Company Survey. In: Cost-of-Capital in Managerial Finance. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-319-15135-9_7

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