debt ratio and faster (slower) leverage adjustments toward the shareholders' desired level for over-levered (under …

This paper studies leverage dynamics when managers cannot commit to future financing and default policies ex … funding advantage of debt. Optimal maturity structure trades off disciplines on the managers' leverage ratcheting incentives …-ante. Managers derive private benefits of control but debt constrains their flexibility, and thus, they build up less excessive …

Textbook theory assumes that firm managers maximize the net present value of future cash flows. But when you ask them …). Perhaps this is a mistake. No matter. We take managers at their word and show that EPS maximization provides a single unified … explanation for a wide range of corporate policies such as leverage, share issuance and repurchases, M&A payment method, cash …

spreads between corporate yields and Treasury rates are low (high), consistent with efforts by managers to adjust their debt …

managers. Our model predicts that high-quality firms may issue equity in equilibrium, which contrasts the results in Fairchild … (2005). Unlike in Fairchild (2005), managers are not equally overconfident and no exogenously given bankruptcy costs exist …

. First, managers who believe that their firm is undervalued view external financing as overpriced, especially equity. Such … overconfident managers use less external finance and, conditional on accessing external capital, issue less equity than their peers … with military experience pursue more aggressive policies, including heightened leverage. Complementary measures of CEO …

-type managers can issue debt to avoid shareholder takeover …