Default probability plays a central role in the static tradeoff theory of capital structure. We directly test this … theory by regressing the probability of default on proxies for costs and benefits of debt. Contrary to predictions of the … theory, firms with higher bankruptcy costs, i.e., smaller firms and firms with lower asset tangibility, choose capital …

Probability of default plays a central role in the static tradeoff theory of capital structure. We provide a direct … test of this theory by regressing the probability of default, measured by S&P credit ratings and Moody's KMV Expected …. Contrary to predictions of the theory, firms with high bankruptcy costs, that is smaller firms and firms with lower asset …

We identify firms according to two life cycle stages, namely growth and maturity, and test the pecking order theory of … financing. We find a strong maturity effect, i.e. the pecking order theory describes the financing behavior of mature firms … capacity. After controlling for firm maturity, the pecking order theory describes the financing behavior of firms fairly well …

This study uses firm level survey data to assess whether the capital structure theory is portable to small firms in …