A number of competing theories have developed regarding the use of secured debt by firms. In adverse selection models, borrowers use collateral to signal quality, whilst moral hazard models assume that the use of collateral improves the incentives for borrowers to work hard to repay debt. In...

This paper examines the role of capital market conditions and target leverage on the marginal financing decisions of REITs, which include both capital raising and capital reduction activities. We investigate the relevance of a hybrid hypothesis whereby REITs have target leverage, but they also...