Purpose – The paper aims at providing insights on the relationship between capital structure and performance of the firm by employing meta-analytical approach to obtain a synthesized result out of controversial studies as well as the sources for such inconsistency.Design/methodology/approach...

This paper focuses on those structural models with an endogenous default barrier where firms optimally choose a default boundary so as to maximize the equity value. The analysis commences to cover avowedly theoretical frameworks from pioneering works by Black-Scholes (1973) and Merton (1974) on...