Revealed Preferences for Corporate Leverage
Philippon examines firms’ capital structure empirically and theoretically. He finds that firm value does not exactly fit the static trade-off model. Specifically he finds that low levels of debt are not accompanied by as low of firm values as would be expected. However, in other areas, what we have been teaching seems exactly right: more growth options means less debt, highly profitable firms do have … [ Read more ]
Content: Article | Author: Thomas Philippon | Source: Social Science Research Network (SSRN) | Subject: Finance