The Effect of Market Conditions on Capital Structure Adjustment

The empirical implications of the trade-off theory, the market timing theory, and Welch's (2003) theory of capital structure are examined using aggregate US data for 1952 to 2000. There is a long-run leverage ratio to which the system reverts. Deviations from that ratio help to predict debt adjustments, but not equity adjustments. A high market-to-book ratio is associated with subsequent debt reduction, but there is no effect in the equity market

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Year of publication:	[2003]
Authors:	Frank, Murray Z.
Other Persons:	Goyal, Vidhan K. (contributor)
Publisher:	[2003]: [S.l.] : SSRN

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Extent:	1 Online-Ressource (13 p)
Type of publication:	Book / Working Paper
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 10, 2003 erstellt
Other identifiers:	10.2139/ssrn.467081 [DOI]
Classification:	G32 - Financing Policy; Capital and Ownership Structure
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012739291