A Case Study on The Corporate Financing Decision in Taiwan

• Main Authors: YUN-YOU LI, 李昀祐
• Other Authors: Liu, Day-Yang
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/81090310638276347970

碩士 === 國立臺灣科技大學 === 財務金融研究所 === 96 === In view of the M formation tendency of Taiwan enterprises, this research is developed in accordance to a large, medium and small size company of the identical trade are picked for this case study. By the collected material analysis and wide / thorough investigation to find out (1) if the financing decision of the company involved is conform to the “Pecking Order Theory”, (2) main consideration factors of financing decision and (3) current enterprise financing problems. As per 3 captioned research topics (issues), main (research) results are listed as follow: 1.The primary pecking order consideration of large enterprise is innate funds (capital), subsequently, the outside loans or issuing of common stocks in accordance to the “Pecking Order Theory”. As for medium and small size companies, they will consider mainly on outside loans; that does not conform to the “Pecking Order Theory” 2.Main financing decision consideration sequential factors of large company are: fund costs, profitability, pre-tax profit, the ability of loans and management risks.Medium size company will consider in the following sequence: funding convenience, capital cost consideration, profitability, management risks and management sovereignty. The small size company mainly considers in the following sequence: funding convenience, capital cost consideration, profitability and management risks. 3.The well (perfectly) pre-planned finance large size companies will not have internal financing problems; however, external factors such as political unstability within the nation, uncertainty of trades between the strait, and the increase of domestic financing commodities do call. 4.Medium and small size companies, in the process of financing, will face the following problems: （1）Excessive request of pledge from bank. （2）For taxation consideration, financial report of company does not correctly express the actual sales / management condition. （3）Banks only pin-point (major) in the evaluation / consideration of financial report of company and rarely consider the value of “human factor” of the manager / operator. （4）The unstability of bank organization and policy will cause inconvenience to the financial planning of medium and small size enterprises. （5）Borrowers are often requested for higher interest rates and handling charges because of their poor financial reports.