Determinants of Debt Financing of SET Listed Companies in the Construction Services Sector

Abstract

This research examined debt financing of 16 SET listed companies in the construction services sector from 2011 to 2016. It was found that the higher the companies’ ability to pay interest and to make profits was the less the companies used debt financing because the companies could use internal funds from their profits. On the other hand, the higher the market value of companies’ equity and the higher the companies’tangible assets were the more the companies used debt financing because the companies were expected to generate high potential cash flows by investors. Thus, the companies are trustworthy. Also, the companies can use their tangible assets as collaterals when borrowing loans.