Capital Structure Policy Decisions in Nordic Listed Firms

In this paper we report the results from a survey among all publicly listed Nordic firms on their policy decisions concerning their capital structure. We find that more than 60 percent of the companies have a rather or relatively flexible debt target, whereas a strict target or no target at all is approximately equally common. We also study the determinants for the strictness of the debt target, and find support for both firm characteristics as well as behavioral variables. We also study the link between capital structure policy and dividend policy, and find that dividend-paying firms as well as firms which state that they have a definite dividend policy are more likely to also have a stricter debt target. These results indicate that more research should be done on the joint setting of capital structure and dividend policies.