Business, Management and Accounting
8 years ago

Firms with high debt levels adjust faster, impacting corporate capital structure.

1 view
Finance research letters
On corporate capital structure adjustments
Viet Anh Dang, Ian Garrett

Paper Summary

The article explores how companies adjust their debt levels to reach their target financial structure. It shows that firms with too much debt and extra funding adjust their debt levels quickly. When considering adjustments in both debt and assets, firms with too much debt and not enough funding adjust the fastest. This suggests that different assumptions about financial dynamics can lead to different conclusions about how companies adjust their financial structure.

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