Monday, August 15, 2005

Market timing and capital structure

Jay Ritter and Ronbing Huang give us more evidence that firms do time security issuance. From their paper:"publicly traded U.S. firms fund a much larger proportion of their financing deficit with external equity when the cost of equity capital is low. Small growth firms rely heavily on debt financing, and only resort to equity markets when the cost of equity is low." It is also important to note

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