Hostname: page-component-77c89778f8-9q27g Total loading time: 0 Render date: 2024-07-17T04:33:35.887Z Has data issue: false hasContentIssue false
  • English
  • Français

The Dynamics of Corporate Debt Management, Decision Rules, and Some Empirical Evidence

Published online by Cambridge University Press:  19 October 2009

John C. G. Boot  and
George M. Frankfurter
Get access Rights & Permissions [Opens in a new window]

Extract

This study deals with the problem of debt — composition of the firm — specifically, the optimal mix of short- and long-term debt, or the optimal maturity composition of the total debt. It can be viewed as a subproblem of the more familiar determination of the optimal mix between total debt and owner's equity (Modigliani and Miller [15 and 16], Durand [3], Schwartz [18], Solomon [20], etc.).

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 7 , Issue 4 , September 1972 , pp. 1957 - 1965
Copyright
Copyright © School of Business Administration, University of Washington 1972

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

[1]Balestra, P., and Nerlove, M.. “Pooling Cross Sections and Time Series Data in the Estimation of a Dynamic Model: The Demand for Natural Gas.” Econometrica, 34, No. 3, July 1966, pp. 585–612.CrossRefGoogle Scholar
[2]Boot, J.C.G.Mathematical Reasoning in Economics and Management Science. Englewood Cliffs, N.J.: Prentice Hall, 1967.Google Scholar
[3]Durand, D. “The Cost of Capital, Corporation Finance, and the Theory of Investment: Comment.” The American Economic Review, Vol. XLIX, No. 4, September 1959, pp. 639–655.Google Scholar
[4]Frankfurter, G. M. The Dynamics of Corporate Debt Management. Ph.D. diss., State University of New York at Buffalo, 1970.Google Scholar
[5]Gordon, M. “Optimal Investment and Financing Policy.” The Journal of Finance, Vol. XVIII, No. 2, May 1963, pp. 264–272.Google Scholar
[6]Holt, C. C.; Modigliani, F.; Muth, J. F.; and Simon, H. A.. Planning Production, Inventories and Work Force. Englewood Cliffs, N.J.: Prentice-Hall, 1960.Google Scholar
[7]Kessel, A. R.The Cyclical Behavior of the Term Structure of Interest Rates. National Bureau of Economic Research, Occasional Paper 91, 1965.Google Scholar
[8]Klein, L. R.A Textbook of Econometrics. Evanston, Ill.: Row Peterson and Company, 1953.Google Scholar
[9]Malkiel, B. G. “Expectations, Bond Prices, and the Term Structure of Interest Rates.” Quarterly Journal of Economics, Vol. LXXVI, No. 2, May 1962, pp. 197–218.CrossRefGoogle Scholar
[10]Malkiel, B. G. “The Term Structure of Interest Rates.” American Economic Review, Vol. LIV, No. 3, May 1964, pp. 532–543.Google Scholar
[11]Markowitz, H.Portfolio Selection; Efficient Diversification of Investments. New York: John Wiley & Sons, Inc., 1959.Google Scholar
[12]Meiselman, D.The Term Structure of Interest Rates. Englewood Cliffs, N.J.: Prentice-Hall, 1962.Google Scholar
[13]Michaelsen, J. B. “The Term Structure of Interest Rates and Holding Period Yield on, Government Securities.” The Journal of Finance, Vol. XX, No. 2, May 1965, pp. 444–463.Google Scholar
[14]Miller, M. H., and Modigliani, F.. “Some Estimates of the Cost of Capital to the Electric Utility Industry 1954–1957.” The American Economic Review, Vol. LVI, No. 3, June 1966, pp. 333–391.Google Scholar
[15]Modigliani, F., and Miller, M. H.. “The Cost of Capital, Corporation Finance, and the Theory of Investment.” The American Economic Review, Vol. XLVIII, No, 3, June 1958, pp. 261–297.Google Scholar
[16]Modigliani, F., and Miller, M. H.. “Corporate Income Taxes and the Cost of Capital: A Correction.” The American Economic Review, Vol. LIII, No. 3, June 1963, pp. 433–443.Google Scholar
[17]Nerlove, M.Estimation and Identification of Cobb-Douglass Production Functions. Chicago: Rand McNally and Company, 1965.Google Scholar
[18]Schwartz, E. “Theory of the Capital Structure of the Firm.” The Journal of Finance, Vol. XIV, No. 1, March 1959, pp. 18–39.Google Scholar
[19]Sharpe, W. F. “A Simplified Model for Portfolio Analysis.” Management Science, 9, January 1963, pp. 277–293.CrossRefGoogle Scholar
[20]Solomon, E. “Leverage and the Cost of Capital.” The Journal of Finance, Vol. XVIII, No. 2, May 1963, pp. 273–279.CrossRefGoogle Scholar
[21]Swamy, P. A. V. B. “Statistical Inference in Random Coefficient Regression Models and Its Application in Economics” (abstract). Annals of Mathematical Statistics, 38, 1967, p. 1940.Google Scholar
[22]Swamy, P. A. V. B. “Statistical Inference in Random Coefficient Regression Models.” Ph.D. diss., University of Wisconsin, 1968.Google Scholar
[23]Theil, H.Optimal Decision Rules for Government and Industry. Amsterdam: North Holland Publishing Company, 1964.Google Scholar
[24]Zellner, A. “Estimation of Cross-Section Relations: Analysis of a Common Specification Error.” Metroeconomics, 1962, pp. 111–117.CrossRefGoogle Scholar