Taxes, bankruptcy costs, transactions costs, adverse selection, and agency conflicts have all
been advocated as major explanations for the corporate use of debt financing. These ideas …

" Magnificent."—The Economist From the Nobel Prize–winning economist, a groundbreaking
and comprehensive account of corporate finance Recent decades have seen great …

We develop a model that endogenizes dynamic financing, investment, and cash
retention/payout policies in order to analyze the effect of financial flexibility on firm value. We …

This paper examines the possible association between financial performance of the firm and
economic indicators, corporate governance, ownership structure, capital structure, and risk …

Leverage raises stock volatility, driving a wedge between the cost of debt to shareholders
and the cost to undiversified, risk-averse managers. I quantify these “volatility costs” of debt …

1. Capital Structure Proxies: The financial-debt-to-asset ratio is flawed as a measure of
leverage, because the converse of financial debt is not equity. Depending on specification …

We seek economic interpretations for two well-known empirical regularities. First, it is well
known that more profitable firms tend to have lower leverage ratios, a pattern driven by the …

We examine the design of control rights of external financiers, and how these interact with
the firm's security issuance and capital structure when the firm's initial owners and managers …

Swedish families exploit the strong separation between ownership and control in pyramiding
to establish control over several firms' internal cash flows via a very small capital investment …

We explore the idea that a firm's financing behavior depends crucially on how its ownership
structure affects the cost differential between internal and external equity. If ownership is …