search query: @author Hovakimian, A. / total: 1
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| Author: | Hovakimian, A. Opler, T. Titman, S. |
| Title: | The Debt-Equity Choice |
| Journal: | Journal of Financial and Quantitative Analysis
2001 : MAR, VOL. 36:1, p. 1-24 |
| Index terms: | DEBT EQUITY CAPITAL SHARE PRICES |
| Language: | eng |
| Abstract: | When firms adjust their capital structures, they tend to move toward a target debt ratio that is consistent with theories based on tradeoffs between the costs and benefits of debt. In contrast to previous empirical work, the authors' tests explicitly account for the fact that firms may face impediments to movements toward their target ratio, and that the target ratio may change over time as the firm's profitability and stock price change. A separate analysis of the size of the issue and repurchase transactions suggests that the deviation between the actual and the target ratios plays a more important role in the repurchase decision than in the issuance decision. |
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