In this paper, we evaluate firm-, industry- and country-specific factors determining a firm's capital structure. The empirical validity of several capital structure theories has been ambiguous so far. We shed light on the main drivers of leverage and depict differences in industry and country...

The existing finance literature is inadequate with respect to its coverage of the debt structure of small and medi-um sized enterprises (SMEs). In addition, the role of trust in accessing finance for such enterprises is under-investigated. This paper presents a mathematical model for optimizing...

This paper develops a model with the novel feature that firms can renegotiate debt both in and outside distress. We show that this feature is crucial for debt renegotiation models to explain corporate policies and debt prices. Specifically, the model reflects empirical credit spread patterns,...

We propose a theory of optimal firm financing given nested information problems of adverse selection and agency cost. We prove that there exists a unique perfect Bayesian equilibrium with novel features: First, three types of optimal contracts arise endogenously, i.e., equity, transparent debt...

A theory of capital structure in which costs associated with asymmetric information are the sole friction is used to present a new perspective on the standard pecking order theory. In the model, both the amount of debt and the restrictiveness of the associated debt covenants are considered to be...

We present a tradeoff theory of capital structure in which costs associated with asymmetric information are the sole friction. By considering both the amount of debt as well as the restrictiveness of the associated debt covenants a more complete characterization of debt structure is examined...

The theory of interest -- Financial flows -- Profitability and risk of a financial transaction -- Portfolio Analysis -- Bonds -- The Modigliani-Miller Theory -- The theory of Brusov — Filatova — Orekhova (theory of the BFO).

This paper examines the dynamics trade-off financial structure in presence of ownership dispersion of newly created firms. Our objective is to test empirically the relevance of trade-off theory regards the debt funding behavior of business start-up. We use a sample of 200 business start-ups and...