This paper examines the timing ability of listed German firms with their equity and debt capital market activities between 01/2001 and 06/2013. Given the assertion that firms try to time the market, the key question of this paper is whether managers are able to time equity and debt capital...

In this paper, we show that an individual optimal credit rating exists for firms and empirically test whether firms strive to achieve their optimal rating. For this purpose, we consider the structural model by Leland [12], which balances the benefits of debt in the form of the tax-deductibility...