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The Pecking Order, Trade-off, Signaling, and Market-Timing Theories of Capital Structure: a Review

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  • Miglo, Anton

Abstract

This paper surveys 4 major capital structure theories: trade-off, pecking order, signaling and market timing. For each theory, a basic model and its major implications are presented. These implications are compared to the available 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.

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File URL: http://mpra.ub.uni-muenchen.de/46691/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 46691.

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Date of creation: 2010
Date of revision: 2013
Handle: RePEc:pra:mprapa:46691

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Keywords: Capital structure; trade-off theory; pecking-order theory. market timing; signalling;

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