Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5069528 | Finance Research Letters | 2015 | 18 Pages |
Abstract
Recent research has examined asymmetries in firms' adjustments toward target leverage. Assuming firms mainly adjust their debt levels, Byoun (2008) finds that firms adjusting most quickly possess two important characteristics: above-target debt and a financing surplus. Using alternative models allowing for adjustments in both debt and total assets, we still find evidence of asymmetries in leverage adjustments, but that firms adjusting fastest have above-target leverage and a financing deficit. Our paper shows how alternative assumptions about leverage dynamics may lead to different conclusions about target adjustment behavior.
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Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Viet Anh Dang, Ian Garrett,