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

Anton Miglo

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Capital structure; trade-off theory; pecking-order theory. market timing; signalling (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 2010, Revised 2013
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Citations: View citations in EconPapers (1)

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