This paper provides a joint quantitative analysis of capital structure decisions (debt versus equity) and debt structure decisions (fixed-rate debt versus floating-rate debt or inflation-linked debt) in a continuous-time setting. We show that optimizing the debt structure has an impact on capital structure decisions, and leads to increases in leverage ratios compared to a pure fixed-rate debt program. We also find that for realistic parameter values, jointly optimizing the debt and capital structures generates a significant increase in firm value with respect to a situation where only the capital structure is optimized.
Martellini, L., Milhau, V., Tarelli, A., Capital Structure Decisions and the Optimal Design of Corporate Market Debt Programs, <<JOURNAL OF CORPORATE FINANCE>>, 2018; 49 (49): 141-167. [doi:10.1016/j.jcorpfin.2017.11.011] [http://hdl.handle.net/10807/108764]
Capital Structure Decisions and the Optimal Design of Corporate Market Debt Programs
Tarelli, Andrea
2018
Abstract
This paper provides a joint quantitative analysis of capital structure decisions (debt versus equity) and debt structure decisions (fixed-rate debt versus floating-rate debt or inflation-linked debt) in a continuous-time setting. We show that optimizing the debt structure has an impact on capital structure decisions, and leads to increases in leverage ratios compared to a pure fixed-rate debt program. We also find that for realistic parameter values, jointly optimizing the debt and capital structures generates a significant increase in firm value with respect to a situation where only the capital structure is optimized.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.