Recent advances in the theory of financial intermediation have enhanced our understanding of the special role of bank loans in funding corporate investments. Much of the benefit from bank loans is generated by the specialized monitoring and information gathering role provided by financial institutions, including their role in facilitating the reorganization of

Financing decisions seem to violate the central predictions of the pecking order model about how often and under what circumstances firms issue equity. Specifically, most firms issue or retire equity each year, the issues are on average large, and they are not typically done by firms under duress

This paper sustains the existence of a biunivocal link between a company’s financing decision and the corporate governance. On the one hand, the financing decision has an impact on corporate performance, which has been confirmed. According to the agency theory, the financing decision

Empirical studies examining the financing decisions of the firm focus exclusively on publicly held firms, not family-controlled firms despite their economic importance. This study investigates the external financing behavior of family-controlled firms, using a comprehensive sample of 777 large

This paper studies the tax effects of financing decisions. We show that subtle, often unstated, tax assumptions play a key role in many capital structure theories, including in the models of Miller (1977), Auerbach (1979), and Hennessy and Whited (2004). Our central thesis is that, under quite

conditions for their equity issuance decisions. Finally, debt ratios of less covered firms are more affected by Baker and Wurgler’s (2002) “external finance-weighted” average market-to-book ratio. These results are consistent with market timing behavior associated with information asymmetry, as well

Abstract. The enterprise financial decision is a rational process for option to the optimal variant related to financing and investments. For the capital investment to be justified, the profitability of the invested money must be at least equal with the profitability of the alternative investment

-invest decision is developed under these assumptions. The mode1 shows that firms may refuse to issue stock, and therefore may pass up valuable investment opportunities. The model suggests explanations for several aspects of corporate financing behavior, including the tendency to rely on internal sources of funds

We investigate the determinants of capital structure choice by analyzing the financing decisions of public firms in the major industrialized countries. At an aggregate level, firm leverage is fairly similar across the G-7 countries. We find that factors identified by previous studies as correlated

for their equity issuances. Taken together, our results reveal that firms take into account financial consequences of implementing CSR policies in their financing decisions. These findings are consistent with recent works establishing a negative impact of CSR performance on information asymmetry and cost of equity.