This article is the first to analyze the simultaneous choice of investment and organizational form using the behavioral finance approach. When entrepreneurs are rational, the choice of investment and organizational form is irrelevant in most cases. However, when entrepreneurs are...

We present the derivation of cost of capital under the assumption of risky tax shields discounted with the cost of levered equity. We show that the formulation is consistent and is derived from basic financial principles. This formulation is valid for finite cash flows and non growing...

This paper empirically examines how debt covenants impact the capital structure choices of firms, by utilizing an exogenous accounting based shock to the distance to covenant violation. We find that, on average, the shock to debt capacity had a positive impact on the debt choices of all treated...

In this note, we comment on and discuss the weirdness and absurdity of the idea that Professor Fernandez has argued for. The weirdness or absurdity of a theory does not automatically disqualify a theory; however, perhaps another review of the implications of the theory may have some merit. It...

La versión española de este artículo se puede encontrar en: 'http://ssrn.com/abstract=2685207' http://ssrn.com/abstract=2685207.We discuss the relevance of personal taxes on Tax Shields. Interest and taxes are the basis for defining an optimal capital structure. When personal taxes are...

I study the relationship between debt maturity and agency conflicts between controlling and minority shareholders in unlisted firms. Exploiting cross-provinces variance in the development of local credit markets, I find a negative joint effect of ownership concentration and short-term bank debt...

Prior evidence shows a reduction in leverage after covenant violations, but we do not know whether covenants affect leverage before they are violated. In this study, we use an exogenous accounting-based shock to debt covenants that relaxed covenant tightness (SFAS 160) and examine whether...

The Spanish version of this paper can be found http://ssrn.com/abstract=1899685This paper estimates the value of tax shields, using the discounted cash flow method for 23 major non financial firms listed in the Bolsa de Valores de Colombia (Colombian Stock Exchange) between 2001 and 2010. Our...

The paper aims to find what determines the choice of companies listed on the Warsaw Stock Exchange (WSE) between public debt (corporate bonds) and private debt (bank loans). For this purpose, we estimate logistic regression models and panel models of corporate borrowing determinants to compare...

Financial structure of the company refers to the structure of financing of business assets and concerns the relationship between their own and borrowed sources of financing. One of the company’s financial goals is to provide optimal financial structure that has the purpose of maximizing...