Changes in enterprise risk management and capital structure decisions as a result of unforeseen and stressful events

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As the market develops and expands, companies increasingly have to deal with market volatility and change. To avoid problems associated with market changes, companies are introducing new strategies and approaches to financing their operations, guided by the desire to reduce risks, costs, or other theories. Choosing the right financing strategy is an important aspect in normal market conditions and unpredictable economic and global events, one of which was the Covid-19 pandemic. As the pandemic crisis was unpredictable and new in nature, many companies had to adapt to the new conditions. As there is no single right formula for building financing strategies, companies considered a lot of macro- and micro-factors and implemented their own strategies to raise funds for their operations. Previous studies show that companies usually consider factors such as profitability, liquidity, tangibility of assets, etc. when choosing a financing strategy. In this research, it is found that the outbreak of the Covid-19 pandemic did not significantly affect the relationship between these factors and the final share of debt in total capital. However, the pandemic significantly impacted the relationship between corporate size and leverage, suggesting that larger companies were more willing to take on additional debt during the crisis. Keywords: Capital structure decisions, leverage, profitability, tangibility of assets, liquidity, size, CPI, Covid-19 pandemic.
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