THE FINANCING OF ENVISAGED CAPITAL INVESTMENTS IN SOUTH AFRICA

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Abstract

The envisaging of capital investments is of prime importance for the economic growth and business development of a country, as it represents the starting point of the entire capital investment process. This paper focuses on the financing of envisaged capital investments and addresses amongst others the various sources of financing and the finance cost thereof, the related capital structure theories, as well as the determinants of the capital structure of an enterprise, which comprise of the economic and firm-specific factors. The objective of this research paper embodies the improvement of the financing decision-making when enterprises are envisaging capital investments. A literature study provided the secondary data and formed the basis of this research. To achieve the research objective, an opinion survey was done to obtain the perceptions of the business leaders in South Africa regarding the importance of the economic and firm-specific factors for the financing of envisaged capital investments, the associated problem areas as perceived by the firms, as well as the frequency of envisaging various types of capital investment projects by the respondents.

Keywords: Capital Investments, Capital Structure, Debt Capital, Equity, Financial Leverage, Weighted Average Cost of Capital

How to cite this paper: Conradie, E., Mostert, F. J., & Mostert, J. H. (2014). The financing of envisaged capital investments in South Africa. Corporate Ownership & Control, 11(2-6), 583-590. https://doi.org/10.22495/cocv11i2c6p5