We investigate the optimal investment timing strategy in a real option framework. Depending on the state of the economy, whose changes are modeled by a Markov chain, the investment cost can take one of two values. The optimal investment timing decision is determined by finding the free boundary...

Using a large sample of firms from 43 markets, we find significant time-series variations in firms’ leverage ratios around the world. Industry median leverage ratios and aggregate leverage ratios also change substantially over time. Relative to actual leverage ratios, target leverage ratios...

We find that US public firms spread out their debt more across different sources in recession quarters, making measures of debt concentration move pro-cyclically, on average. There is substantial cross-sectional variation in these dynamics. In particular, firms with already low leverage and high...