Three essays on capital structure
Item
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Title
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Three essays on capital structure
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Identifier
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d_2009_2013:6b617667c204:11064
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identifier
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11346
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Creator
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Li, Guangzhong,
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Contributor
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Armen Hovakimian
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Date
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2011
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Language
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English
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Publisher
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City University of New York.
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Subject
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Finance | Business administration
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Abstract
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In the first chapter, various target proxies and modifications to the standard methodologies are examined to identify partial-adjustment and debt-equity choice models that have power to reject the target adjustment hypothesis. The resulting estimates of the speed of adjustment are in the range of five-thirteen percent per year.;The second chapter suggests that the estimates of the speed of adjustment to target leverage tend to be significant but low. I use both ex-ante and ex-post information to identify situations when the adjustment should be full. I find no evidence of full adjustment. The adjustments to target are rarely full, with many firms adjusting beyond or away from the target. The results imply that empirical analyses, such as partial adjustment regressions, that rely on the existence of a well-defined target debt ratio may be ill-suited for quantifying the importance of dynamic tradeoff behavior vis-a-vis alternative theories.;The third chapter shows that shorter debt maturity structure increase firm value for growth firms. The liquidity effect is another important determinant of valuation effects of shorter debt maturity structure. The analysis on corporate investment supports these findings.
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Type
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dissertation
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Source
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2009_2013.csv
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degree
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Ph.D.
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Program
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Business
