The paper reports that, when firms follow the Pecking Order Theory, a sub-optimality with the cost components of firms' capital structure exists. The sub-optimality drives firms to follow the Trade-Off Theory to reach optimality concerning the cost components of capital structure. At higher...

The present paper considers the issue of corporate strategic financing choices from the dynamic views, and it puts forward a unifying view, where the view logically argues that the issue of financing decision is a combined choice of the firms' decision set of “time-state-focus”. The view...

Purpose:- In contrast to a 'point of view' theory, a unifying view fits different view points in firms' financing choices. It requires reconciliation of the points of views. We work on that end and examine the same with Indian firms' data empirically.Methods:- Given that CFOs show dynamic...

In explaining the dynamics of corporate Reserve Debt Capacity (RDC) at its utilization and creation of the high-risk and low-risk RDC by the high-value and low-value firms, the present paper seeks to put forward a new theory in literature. Utilizing the concept of suboptimality at firms' pecking...

In examining the adjustment speed in the dynamic capital structure choice of the firms, the present study utilizes a dynamic Partial Adjustment Model (PAM), and extends the work of Drobetz and Wanzenried (2006). The study explores whether firms' recapitalization policy allows dynamic adjustments...

On the query of corporate capital structure dynamics, an inclusive theory that unifies the ‘modern' capital structure theories is pending as yet. A comprehensive capital structure theory should consider the firms' time-state-focus choices over time. Firms' comprehensive capital structure...