The Pecking Order, Trade-off, Signaling, and Market-Timing Models

Miglo, Anton (2011) The Pecking Order, Trade-off, Signaling, and Market-Timing Models. In: Capital Structure and Corporate Financing Decisions: Theory, Evidence, and Practice. Robert W. Kolb Series . Wiley, pp. 171-190. ISBN 978-0-470-56952-8

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Abstract

The financial crisis of 2008-2009 forced financial economists to look critically at capital structure theory because the problems faced by many companies stemmed from their financing policies. This chapter surveys four major capital structure theories: trade-off, pecking order, signaling, and market timing. These theories directly relate to asymmetric information, agency problems, taxes, and bankruptcy costs. For each theory, a basic model and its implications are presented. These implications are compared to the available research evidence. This is followed by an overview of pros and cons for each theory. A discussion of major recent papers and suggestions for future research are provided.

Item Type:	Book Section
Dates:	Date Event 20 April 2010 Accepted 2011 Published
Subjects:	CAH17 - business and management > CAH17-01 - business and management > CAH17-01-02 - business studies CAH17 - business and management > CAH17-01 - business and management > CAH17-01-04 - management studies CAH17 - business and management > CAH17-01 - business and management > CAH17-01-07 - finance
Divisions:	Faculty of Business, Law and Social Sciences > College of Accountancy, Finance and Economics Faculty of Business, Law and Social Sciences > College of Business, Digital Transformation & Entrepreneurship
Depositing User:	Anton Miglo
Date Deposited:	21 Aug 2018 07:59
Last Modified:	20 Jun 2024 12:07
URI:	https://www.open-access.bcu.ac.uk/id/eprint/6247

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