Analysis of the capital structure and debt heterogeneity of publicly traded companies in the industrial and agribusiness sector

Abstract

Purpose: In recent years, the subsidized credit provided by the Brazilian government to some sectors of the economy through financing lines, such as FINAME, FIDIC, from BNDES, may have resulted in a reduction in the costs of the capital structure. Thus, the purpose of this work is to verify if there was a reduction in the cost of capital of publicly traded companies in two important economic sectors, the industrial sector and sectors related to agribusiness. Methodology: Information regarding financing sources, financing amount, currency and interest rates were collected from the Explanatory Notes to the financial statements of 84 publicly traded companies and used to calculate the weighted average cost of capital of the financing sources at subsidized rates and not subsidized. Results: The results show that loans with subsidized rates present a great variability in the participation of loans with subsidized rates in the composition of financing of companies, but showing, on average, a low percentage in the composition of indebtedness, and that the effective rates averages of subsidized loans may be higher than the average effective rates of non-subsidized loans, suggesting that subsidized credits, in proportion to which they have been used to compose the financing, may not play a relevant role in reducing the costs of the capital structure of companies Contributions of the Study: This work contributes to the identification of relevant factors that explain how companies determine their capital structure, providing administrators with indications on which factors are preponderant in the practical performance of companies' capital structure policy.