Debt dynamics

被引:395
作者
Hennessy, CA [1 ]
Whited, TM
机构
[1] Univ Calif Berkeley, Berkeley, CA 94720 USA
[2] Univ Wisconsin, Madison, WI 53706 USA
关键词
D O I
10.1111/j.1540-6261.2005.00758.x
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
We develop a dynamic trade-off model with endogenous choice of leverage, distributions, and real investment in the presence of a graduated corporate income tax, individual taxes on interest and corporate distributions, financial distress costs, and equity flotation costs. We explain several empirical findings inconsistent with the static trade-off theory. We show there is no target leverage ratio, firms can be savers or heavily levered, leverage is path dependent, leverage is decreasing in lagged liquidity, and leverage varies negatively with an external finance weighted average Q. Using estimates of structural parameters, we find that simulated model moments match data moments.
引用
收藏
页码:1129 / 1165
页数:37
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