Equity Mispricing and Leverage Adjustment Costs
| Autor: | Johanna Koëter-Kant, William B. Elliott, Özde Öztekin, Richard S. Warr |
|---|---|
| Přispěvatelé: | Finance |
| Jazyk: | angličtina |
| Rok vydání: | 2012 |
| Předmět: |
Economics and Econometrics
Leverage (finance) Capital structure media_common.quotation_subject Equity ratio Private equity firm Monetary economics Private equity fund SDG 17 - Partnerships for the Goals Leverage (negotiation) Return on equity Debt Accounting Economics media_common Finance Equity risk business.industry Equity (finance) Market timing business Equity capital markets Debt-to-capital ratio Residual income valuation |
| Zdroj: | Warr, R S, Elliott, W B, Koeter-Kant, J & Oztekin, O 2012, ' Equity Mispricing and Leverage Adjustment Costs ', Journal of Financial and Quantitative Analysis, vol. 47, no. 3, pp. 589-616 . https://doi.org/10.1017/S0022109012000051 Journal of Financial and Quantitative Analysis, 47(3), 589-616. Cambridge University Press |
| ISSN: | 0022-1090 |
| Popis: | We find that equity mispricing impacts the speed at which firms adjust to their target leverage (TL) and does so in predictable ways depending on whether the firm is over- or underlevered. For example, firms that are above their TL and should therefore issue equity (or retire debt) adjust more rapidly toward their target when their equity is overvalued. However, when a firm is undervalued but needs to reduce leverage, the speed of adjustment is much slower. Our findings support the role of equity mispricing as an important factor that alters the cost of making capital structure adjustments. © Copyright 2012 Michael G. Foster School of Business, University of Washington. |
| Databáze: | OpenAIRE |
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