At London School of Business and Finance (LSBF) in Singapore, we measure success by the impact our students, faculty, and alumni have in the region. This is another financial theory, which is to be considered in relation to SMEs financial management. It is a finance theory which suggests that management prefers to finance first from retained earnings, then with debt, followed by hybrid forms of finance such as convertible loans, and last of all by using externally issued equity; with bankruptcy costs, agency costs, and information asymmetries playing little role in affecting the capital structure policy. A research study carried out by Norton (1991b) found out that 75% of the small enterprises used seemed to make financial structure decisions within a hierarchical or pecking order frameworkHolmes et al. (1991) admitted that POF is consistent with small business sectors because they are owner-managed and do not want to dilute their ownership. Owner-managed businesses usually prefer retained profits because they want to maintain the control of assets and business operations.
An open source electronic version of all theses will be published on uc3m’s website, -/handle/10016/16124 Copies will also be available on the thesis repository of the Ministry of Education, Culture and Sport, If your dissertation is affected by partial and/or temporary restrictions on some or all of the material to be published, you must supply documentary evidence to support your case and request that an edited version of your dissertation be published or that access to your dissertation be restricted temporarily.
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