Logo
Munich Personal RePEc Archive

A New Capital Structure Theory: The Four-Factor Model

Miglo, Anton (2021): A New Capital Structure Theory: The Four-Factor Model.

[thumbnail of MPRA_paper_105102.pdf]
Preview
PDF
MPRA_paper_105102.pdf

Download (193kB) | Preview

Abstract

This article presents a new capital structure model based on four factors well documented in literature: asymmetric information, taxes, bankruptcy costs and decision-makers' overconfidence. The model can simultaneously explain several facts about capital structure including those that remain puzzling from existing theories point of view eg. negative correlation between debt and profitability; why firms issue equity etc. Unlike many advanced research on capital structure, a closed-form solution is obtained for most results.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.