Capital Structure and Corporate Financing Decisions

A comprehensive guide to making better capital structure and corporate financing decisions in today's dynamic business environment Given the dramatic changes that have recently occurred in the economy, the topic of capital structure and corporate financing decisions is critically important. The fact is that firms need to constantly revisit their portfolio of debt, equity, and hybrid securities to finance assets, operations, and future growth. Capital Structure and Corporate Financing Decisions provides an in-depth examination of critical capital structure topics, including discussions of basic capital structure components, key theories and practices, and practical application in an increasingly complex corporate world. Throughout, the book emphasizes how a sound capital structure simultaneously minimizes the firm's cost of capital and maximizes the value to shareholders. Offers a strategic focus that allows you to understand how financing decisions relates to a firm's overall corporate policy Consists of contributed chapters from both academics and experienced professionals, offering a variety of perspectives and a rich interplay of ideas Contains information from survey research describing actual financial practices of firms This valuable resource takes a practical approach to capital structure by discussing why various theories make sense and how firms use them to solve problems and create wealth. In the wake of the recent financial crisis, the insights found here are essential to excelling in today's volatile business environment.

A comprehensive guide to making better capital structure andcorporate financing decisions in today's dynamic businessenvironmentGiven the dramatic changes that have recently occurred in theeconomy, the topic of capital structure and corporate financingdecisions is critically important. The fact is that firms need toconstantly revisit their portfolio of debt, equity, and hybridsecurities to finance assets, operations, and future growth.Capital Structure and Corporate Financing Decisionsprovides an in-depth examination of critical capital structuretopics, including discussions of basic capital structurecomponents, key theories and practices, and practical applicationin an increasingly complex corporate world. Throughout, the bookemphasizes how a sound capital structure simultaneously minimizesthe firm's cost of capital and maximizes the value toshareholders.* Offers a strategic focus that allows you to understand howfinancing decisions relates to a firm's overall corporatepolicy* Consists of contributed chapters from both academics andexperienced professionals, offering a variety of perspectives and arich interplay of ideas* Contains information from survey research describing actualfinancial practices of firmsThis valuable resource takes a practical approach to capitalstructure by discussing why various theories make sense and howfirms use them to solve problems and create wealth. In the wake ofthe recent financial crisis, the insights found here are essentialto excelling in today's volatile business environment.

Acknowledgments ix1 Capital Structure: An Overview 1H. Kent Baker and Gerald S. MartinPart I The Elements of Capital Structure 152 Factors Affecting Capital Structure Decisions 17Wolfgang Bessler, Wolfgang Drobetz, and Robin Kazemieh3 Capital Structure and Corporate Strategy 41Maurizio La Rocca4 Capital Structure and Firm Risk 59Valentin Dimitrov5 Capital Structure and Returns 75Yaz Gulnur Muradoglu and Sheeja Sivaprasad6 Capital Structure and Compensation 93Alan Victor Scott Douglas7 Worldwide Patterns in Capital Structure 111Carmen Cotei and Joseph FarhatPart II Capital Structure Choice 1278 Capital Structure Theories and Empirical Tests: An Overview 129Stein Frydenberg9 Capital Structure Irrelevance: TheModigliani-Miller Model 151Sergei V. Cheremushkin10 Trade-Off, Pecking Order, Signaling, and Market Timing Models 171Anton Miglo11 Estimating Capital Costs: Practical Implementation of Theory's Insights 191Robert M. Conroy and Robert S. Harris12 Economic, Regulatory, and Industry Effects on Capital Structure 211Paroma Sanyal13 Survey Evidence on Financing Decisions and Cost of Capital 229Franck Bancel and Usha R. Mittoo14 Survey Evidence on Capital Structure: Non-U.S. Evidence 249Abe de Jong and Patrick VerwijmerenPart III Raising Capital 26115 The Roles of Financial Intermediaries in Raising Capital 263Neal Galpin and Heungju Park16 Bank Relationships and Collateralization 281Aron A. Gottesman and Gordon S. Roberts17 Rating Agencies and Credit Insurance 299John Patrick Hunt18 Secured Financing 319Hugh Marble III19 Sale and Leasebacks 335Kyle S. WellsPart IV Special Topics 35120 Financial Distress and Bankruptcy 353Kimberly J. Cornaggia21 Fiduciary Responsibility and Financial Distress 371Remus D. Valsan and Moin A. Yahya22 The Lease versus Buy Decision 387Sris Chatterjee and An Yan23 Private Investment in Public Equity 401William K. Sjostrom Jr.24 Financing CorporateMergers and Acquisitions 419Wolfgang Bessler, Wolfgang Drobetz, and Jan ZimmermannAnswers to Chapter Discussion Questions 445Index 475