Journal of Corporate Finance Vol. 49 2018
Capital structure decisions and the optimal design of corporate market debt programs
Abstract
This paper provides a joint quantitative analysis of capital structure decisions (debt versus equity) and debt structure decisions (fixed-rate debt versus floating-rate debt or inflation-linked debt) in a continuous-time setting. We show that optimizing the debt structure has an impact on capital structure decisions, and leads to increases in leverage ratios compared to a pure fixed-rate debt program. We also find that for realistic parameter values, jointly optimizing the debt and capital structures generates a significant increase in firm value with respect to a situation where only the capital structure is optimized.
- DOI
- 10.1016/j.jcorpfin.2017.11.011
- Volume
- 49
- Pages
- 141-167
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref