Optimal Capital Structure and Speed of Adjustment: Inside Debt Perspective
Date Issued
2014
Date
2014
Author(s)
Chang, Yi-Han
Abstract
This study examines the effects of inside debts on a firm''s target leverage and explains the low-leverage puzzle (e.g. Graham, 2000) by the over estimation of the target leverage due to neglecting the effects of inside debts. We find that a firm’s inside debt affects not only the target leverage, but also the speed of adjustment toward that target. A firm’s target leverage is negatively related to the amount of inside debt and the effect of inside debt is alleviated when a firm’s funding status is positive. Additionally, the adjustment speeds are faster when considering inside debt effects during 1985-2012 and 2007-2012. If we separated the whole sample firms into below- and above- traditional target leverage, we find that adjustment speeds are slower (faster) when firms have below-target (above- target) leverage after 2007.
Subjects
內部負債
資本結構迷思
最適槓桿
調整速度
抵換理論
Type
thesis
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ntu-103-R01723033-1.pdf
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