Powered by OpenAIRE graph
Found an issue? Give us feedback
addClaim

Capital Structure, Debt Maturity, and Stochastic Interest Rates*

Authors: Ju, Nengjiu; Hui, Ou-Yang;

Capital Structure, Debt Maturity, and Stochastic Interest Rates*

Abstract

This article develops a model in which optimal capital structure and debt maturity are jointly determined in a stochastic interest rate environment. The model yields leverage ratios that are consistent in spirit with empirical observations. The optimal maturity and credit spread of an optimally issued debt are found to be smaller than observed values. The long‐run mean of the interest rate is found to be a key variable in determining optimal capital structure and debt maturity. Furthermore, the interest rate volatility and the correlation between the interest rate and the firm’s asset value play important roles in determining debt maturity.

Country
China (People's Republic of)
  • BIP!
    Impact byBIP!
    selected citations
    These citations are derived from selected sources.
    This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
    37
    popularity
    This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
    Top 10%
    influence
    This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
    Top 10%
    impulse
    This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
    Average
Powered by OpenAIRE graph
Found an issue? Give us feedback
selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
37
Top 10%
Top 10%
Average
Upload OA version
Are you the author of this publication? Upload your Open Access version to Zenodo!
It’s fast and easy, just two clicks!