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Investment Patterns and Financial Leverage / Michael S. Long, Ileen B. Malitz.
- Format:
- Book
- Author/Creator:
- Long, Michael S.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w1145.
- NBER working paper series no. w1145
- Language:
- English
- Subjects (All):
- Capital investments--Mathematical models.
- Capital investments.
- Investments--Mathematical models.
- Investments.
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1983.
- Cambridge, Massachusetts : National Bureau of Economic Research, 1983.
- Summary:
- This study Investigates the influence of the type of investment opportunities facing a firm on its choice of capital structure. It is shown that the more discretionary investment opportunities a firm faces,the lower its financial leverage. Inclusion of other possible determinants of capital structure, such as availability of internal funds, tax effects and risk, while significant, do not affect the importance of discretionary investment. The evidence supports (1) the existence of a moral bazzard problem which inversely relates risky debt and discretionary investment choice, and (2) a desire by most firms to use sources of internal funds prior to entering the capital market.
- Notes:
- Print version record
- June 1983.
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