THE RELATIONSHIP BETWEEN DEBT LEVELS AND TOTAL SHAREHOLDER RETURN OF JSE-LISTED PLATINUM COMPANIES

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Sandra Jooste, Susanna Levina (Sanlie L.) Middelberg ORCID logo, Merwe Oberholzer ORCID logo

DOI:10.22495/rgcv6i1art1

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Abstract

The purpose of this study is to investigate empirically whether there is a positive correlation between debt levels and total shareholder return (TSR) of platinum JSE-listed companies. The study field comprised annual analyses for 12 companies listed under the Platinum and Precious Metals sector on the JSE Ltd for the 14-year period 2000 to 2013. The results of the study were inconclusive as a statistically significant positive correlation between changes in debt levels and changes in TSR could only be found in two of these years. The core audience of the study will be the management of South African platinum companies considering changes in their capital structure, and investors considering investment in a listed platinum company. The contribution of the study is therefore to add to the body of literature on capital structure decisions from a South African platinum mine context.

Keywords: South Africa, Debt Levels, Share Prices, Shareholder Return, Platinum Industry, Risk

How to cite this paper: Jooste, S., Middelberg, S., & Oberholzer, M. (2016). The relationship between debt levels and total shareholder return of JSE-listed platinum companies. Risk governance & control: financial markets & institutions, 6(1), 7-13. http://dx.doi.org/10.22495/rgcv6i1art1