Capital structure dynamics and stock returns

• Main Authors: CAI, Jie, ZHANG, Zhe
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2006
• Subjects: Capital structure; leverage change; stock returns; pecking-order; trade-off models; Finance and Financial Management; Portfolio and Security Analysis
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/1130; https://ink.library.smu.edu.sg/context/lkcsb_research/article/2129/viewcontent/SSRN_id685462.pdf
• Institution: Singapore Management University

Many finance theories predict that the capital structure affects firm value, which implies that the changes in leverage have an impact on stock returns. Most of the existing literature however has been focusing on the determinants of the capital structure. Using a sample of U.S. public firms during...