Timing of Earnings and Capital Structure

Anton Miglo

MPRA Paper from University Library of Munich, Germany

Abstract: This paper shows that asymmetric information about the timing of earnings can affect corporate capital structure. It sheds some new light on two following questions: why may profitable firms be interested in issuing equity, and why does debt not necessarily signal a firm quality. These issues seem to be puzzling from the classical pecking-order theory or signalling theory point of view. The paper also contributes to the analysis of the link between debt-equity choice and subsequent performance after issue (short-term versus long-term) which has been widely discussed in empirical literature but did not get enough attention in theoretical research.

Keywords: Asymmetric information; Pecking-order theory; Signalling; Timing of earnings (search for similar items in EconPapers)
JEL-codes: D82 D86 D92 G32 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-cta
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Related works:
Journal Article: Timing of earnings and capital structure (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:56547

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