Honors College Theses

Publication Date



Accounting (BBA)

Document Type and Release Option

Thesis (open access)

Faculty Mentor

Adam Du Pon


This study explores how companies within the utilities industry choose to finance their companies through debt vs. equity. Results from regression analysis show that debt has a significantly greater negative impact on business performance, when compared to the use of equity. This leads to a conclusion that companies tend to utilize equity financing when faced with a positive outlook for their business performance. Conversely, companies utilize debt more when faced with a negative outlook regarding business performance.

Thesis Summary

Design/methodology/approach: This study is based on data regarding the utilities industry. Regression analysis is used to examine the effect financing through debt vs. equity has within the utilities industry.

Findings: The findings showed that both equity and debt issuance harm firm performance, however, debt issuance has a stronger, more significant detrimental effect on business performance. These results explain why equity financing tends to be used during upward trends for businesses, while debt is used more during downtrends for companies.

Value: This paper provides a research framework for examining the effects of the decision to finance through debt vs. equity and how various factors, such as profitability, can influence this decision.

Included in

Accounting Commons