Refinancing, profitability, and capital structure

• 成果类型: Article
• 署名作者: Danis, Andras; Rettl, Daniel A.; Whited, Toni M.
• 署名单位: University System of Georgia; Georgia Institute of Technology; Humboldt University of Berlin; University of Rochester; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2014.07.010
• 发表日期: 2014
• 页码: 424-443
• 关键词: capital structure; profitability; Refinancing points

摘要

We revisit the well-established puzzle that leverage is negatively correlated with measures of profitability. In contrast, we find that at times when firms are at or close to their optimal level of leverage, the cross-sectional correlation between profitability and leverage is positive. At other times, it is negative. These results are consistent with dynamic trade-off models in which infrequent capital structure rebalancing is optimal. The time series of market leverage and profitability in the quarters prior to rebalancing events match the patterns predicted by these models. Our results are not driven by investment layouts, market timing, payout, or mechanical mean reversion of leverage. (C) 2014 Elsevier B.V. All rights reserved.