We analyze the impact of expected (targeted) capital structure decisions on information asymmetries. We measure information asymmetry from equity liquidity through the use of an information asymmetry index that is based on six measures that capture trading activity, trading costs, and the price...

This paper uses a new perspective to analyze information obtained from capital structure decisions. Most previous studies either separately tested how firms adjust to leverage targets, or observed how financial policy changes convey information such as balance sheet items. However, we analyze...