ON THE EXISTENCE OF AN OPTIMAL CAPITAL STRUCTURE: THEORY AND EVIDENCE

@article{Bradley1984ONTE,
  title={ON THE EXISTENCE OF AN OPTIMAL CAPITAL STRUCTURE: THEORY AND EVIDENCE},
  author={Michael Bradley and G. Jarrell and E. H. Kim},
  journal={Journal of Finance},
  year={1984},
  volume={39},
  pages={857-878}
}
  • Michael Bradley, G. Jarrell, E. H. Kim
  • Published 1984
  • Economics
  • Journal of Finance
  • ONE OF THE MOST contentious issues in the theory of finance during the past quarter century has been the theory of capital structure. The geneses of this controversy were the seminal contributions by Modigliani and Miller [18, 19]. The general academic view by the mid-1970s, although not a consensus, was that the optimal capital structure involves balancing the tax advantage of debt against the present value of bankruptcy costs. No sooner did this general view become prevalent in the profession… CONTINUE READING
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