Capital structure is still a puzzle among finance scholars. Purpose of this study is to review various capital structure theories that have been proposed in the finance literature to provide clarification for the firms' capital structure decision. Starting from the capital structure irrelevance...

Many stylized facts of leverage, trading, and asset prices obtain in a frictionless general equilibrium model that features agents' heterogeneity in endowments and habit preferences. Our model predicts that aggregate debt increases in expansions when asset prices are high, volatility is low, and...

When a nation can finance its investments via foreign-currency denominated debt or domestic-currency claims, what is the optimal capital structure of the nation? Building on the functions of fiat money as both medium of exchange, and store of value like corporate equity, our model connects...

Capital structure literature shows that, in static tradeoff theory, a firm's target leverage is related to its size and profitability. However, it remains unclear as to whether target leverage even exists. Assuming that it does, two key questions arise. First, how does the company adjust to the...

When a nation can finance its investments via foreign-currency denominated debt or domestic-currency claims, what is the optimal capital structure of the nation? Building on the functions of fiat money as both medium of exchange, and store of value like corporate equity, our model connects...

Accounting information was often used to determine the effect of quality management initiatives. Relation between quality management and financial performance of the companies was extensively explored but with the conflicting results. The most recent studies introduced intermediary factors...

Previous studies that have tested the pecking order theory have been inconclusive. In this paper, we use unique survey results for private Brazilian firms in order to investigate firms' choice of capital structure. We document that ultimate owners of privately owned firms follow the pecking...