Leverage Dynamics without Commitment

• 成果类型: Article
• 署名作者: Demarzo, Peter M.; He, Zhiguo
• 署名单位: Stanford University; National Bureau of Economic Research; University of Chicago
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13001
• 发表日期: 2021
• 页码: 1195-1250
• 关键词: optimal capital structure; corporate-debt; RISK; liquidity; maturity

摘要

We characterize equilibrium leverage dynamics in a trade-off model in which the firm can continuously adjust leverage and cannot commit to a policy ex ante. While the leverage ratchet effect leads shareholders to issue debt gradually over time, asset growth and debt maturity cause leverage to mean-revert slowly toward a target. Investors anticipate future debt issuance and raise credit spreads, fully offsetting the tax benefits of new debt. Shareholders are therefore indifferent toward the debt maturity structure, even though their choice significantly affects credit spreads, leverage levels, the speed of adjustment, future investment, and growth.