Capital Structure and Stock Returns

Article, Preprint OPEN
Ivo Welch;
  • Journal: Journal of Political Economy,volume 112,issue 1 February,pages106-131
  • Related identifiers: doi: 10.1086/379933

U.S. corporations do not issue and repurchase debt and equity to counteract the mechanistic effects of stock returns on their debt-equity ratios. Thus over one- to five-year horizons, stock returns can explain about 40 percent of debt ratio dynamics. Although corporate ... View more
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