CAPITAL BUDGETING PRACTICES: AN EMPIRICAL STUDY OF LISTED SMALL EN MEDIUM ENTERPRISES

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John H. Hall, T. Sibanda

DOI:10.22495/cocv13i3c1p6

Abstract

There have been many studies on the capital budgeting practices of large listed companies, but relatively little research has been undertaken on the capital budgeting practices of small listed companies. The main purpose of this study was therefore to analyse the capital budgeting practices of small and medium South African listed companies and to compare their capital budgeting practices to the capital budgeting practices of large listed companies. The results of the study indicate that the primary capital budgeting techniques employed by small listed companies are based on the IRR and the NPV, resembling the practices used by larger companies. Furthermore, the use of discounted cash flow techniques amongst small listed companies had increased over the last decade.

Keywords: SME’s, Capital Budgeting, South Africa

How to cite this paper: Hall, J.H., Sibanda, T. (2016). Capital budgeting practices: an empirical study of listed small en medium enterprises. Corporate Ownership & Control, 13(3-1), 199-208. http://dx.doi.org/10.22495/cocv13i3c1p6