英文摘要 |
This paper aims to enable a better understanding of the determinants of capital structure in Taiwan 50 under the information symmetry condition by using a combination of trade-off and pecking order theories. Pecking order theory has previously demonstrated the failure of trade-off theory in capturing the optimal capital structure within the context of regression methodology. However, financing decisions seem to violate the central prediction of the pecking order model regarding financing behavior. Based on the capital structure theories, a comprehensive theoretical and parsimony model called the signal factor hypothesis model, which combines the trade-off and pecking order theories, is hereby proposed. In the signal factor hypothesis model, firms identify target leverage by weighing the benefits between additional dollar of debt and equity. The signal factor hypothesis serves as an opportunity to combine the two competing models. This paper provides evidence of how asymmetric information conditions affect capital structure choice. It also rationalizes other aspects of corporate borro... |