Professor Stuart Archbold from Kingston University, CMMU's exchange partner, gave a lunch seminar at CMMU on Monday 8th November. The subject of the talk was: "How do Firms Choose between Equity and Debt?".Prof. Stuart explained that the choice that firms make between debt and equity can have profound effects on their performance. On the one hand putting debt on the balance sheet can help to increase earnings for shareholders, as long as revenues are stable or increasing. However, if revenue declines, then those earnings will fall even more quickly than the fall in revenue and in the extreme can lead to bankruptcy.The presentation provided evidence on how firms around the world make those choices, drawing on survey evidence from the U.K. and Greece.
