Does the Source of Capital Affect Capital Structure?

@article{Faulkender2003DoesTS,
  title={Does the Source of Capital Affect Capital Structure?},
  author={Michael W. Faulkender and M. Petersen},
  journal={NBER Working Paper Series},
  year={2003}
}
  • Michael W. Faulkender, M. Petersen
  • Published 2003
  • Economics, Business
  • NBER Working Paper Series
  • Empirical examinations of capital structure have led some to conclude that firms are under-levered. Implicit in this argument and much of the empirical work on leverage is the assumption that the availability of incremental capital depends solely on the risk of the firm's cash flows and characteristics of the firm. However, the same market frictions that make capital structure relevant suggest that firms may be rationed by lenders, leading some firms to appear to be under-levered relative to… CONTINUE READING
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