This paper surveys 4 major capital structure theories: trade-off, pecking order, signaling and market timing. For each theory, a basic model and its major implications are presented. These implications are compared to the available evidence. This is followed by an overview of pros and cons for...

We analyze the financing decisions and capital structure of internet companies and relate observed findings to the common capital structure theories. Large internet companies usually have low debt and small internet companies have high debt. We find that the trade-off theory of capital...