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A study of Spanish firms' security issue decision under asymmetric information and agency costs

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Author Info
Rubén Arrondo
Silvia Gómez-Ansón

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Abstract

The ability of asymmetric informational models and agency models is analysed to explain the firm's security issue choice and the market reaction to equity and bond issues. The results support mainly agency models as an explanation for the firm's decisions to issue debt or equity, while the market reaction to equity issues is both explained by models of asymmetry of information and agency models. The study also highlights the importance of considering different contexts when analysing capital structure decisions.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Applied Financial Economics.

Volume (Year): 13 (2003)
Issue (Month): 10 (October)
Pages: 771-782
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Handle: RePEc:taf:apfiec:v:13:y:2003:i:10:p:771-782

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    Other versions:
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    Other versions:
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    Other versions:
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