This paper examines the relationships between the changes in the firm's capital structure and their effects on the firm's market value for three different levels of systematic risk. The underlying assumption of signaling is that when a firm changes its capital structure, its market value might...

This paper examines the relationships between changes in firm's debt and its effects on firm's market value in a transitional market. The market value is considered as a measure of the investment worthiness. The signaling effect refers to the effects of debt on firm's market value.The paper...

This paper examines the signaling hypothesis of firm's debt on its market value in a transitional market. The methodology addresses at the first stage the determination of the relevant determinants of capital structure in a transitional economy. Next, the potential signaling effects of the...