Do Firms rebalance their capital structures ?

Deskripsi

We empirically examine whether firms engage in a dynamic rebalancing of their capital structures while allowing for costly adjustment. We begin by showing that the presence of adjustment costs has significant implications for corporate financial policy and the interpretation of previous empirical results. After confirming thet financing behavior is consistent with the presence of adjusment costs, we find that firms actively rebalance their leverage to stay within an optimal range..Printed Journal