However, extended investigations of capital structure theory
have not provided answers.
Awan and Amin (2014) investigate which factors affect which of 68 textile firms of Pakistan listed on Karachi Stock Exchange during 2006-2012 and which type of capital structure theory
does more prevail in textile sector of Pakistan.
2007) Do Tests of Capital Structure Theory
Mean What They Say?
Knowledge of capital structure theory
and practice is important in stock repurchase programs.
In this study, we examine the capital structures of firms that emerge from the Chapter 11 reorganization process to ascertain whether the capital structures: 1) are completely reset according to capital structure theory
, 2) stem from Kahl's (2002) dynamic theory of controlled liquidation, and/or 3) reflect inefficiencies and other characteristics of the Chapter 11 process.
Because there may exist more than one proxy for the latent attributes specified by capital structure theory
as determinants of capital structure, equation (6) implies that these proxies can be expressed as linear function of one or more latent attributes plus a random measurement error.
While coverage of traditional capital structure theory
and analysis is included, the main focus is on the analysis of what companies do in practice.
This essay analyzes the theoretical evidence for the capital structure theory
Capital structure theory
as put forth by Modigliani and Miller (1958) asserts that firms select a capital structure that minimizes their weighted average cost of capital.
By 1989, Myron Gordon of the University of Toronto cited 48 articles and books that challenged the MM capital structure theory
335 Middle One-Third Capital structure theory
and liability management 5.
They then offer a new capital structure theory
that captures the unique features of REITs, and they identify factors which differentiate apartment REITs.