On testing the Tradeoff Theory of capital structure with real options

Author(s)
Shore, William T., S.M. (William Thomas). Massachusetts Institute of Technology
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Massachusetts Institute of Technology. Dept. of Economics.
Advisor
Stewart C. Myers.
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Abstract
We explain often anomalous results of capital structure tests by infusing tradeoff theory with real options. Of course one can explain almost everything using a soft qualitative theory. This paper's addition is to use a quantitative approach to generate tradeoff theory predictions for firms with valuable real options. We are able to explain many of the results of Rajan and Zingales (1995), Welch (2004), and Flannery and Rangan (2006).
Description
Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Economics, June 2012.
 
"June 2012." Cataloged from PDF version of thesis.
 
Includes bibliographical references (p. 120-122).
 
Date issued
2012
URI
http://hdl.handle.net/1721.1/72844
Department
Massachusetts Institute of Technology. Department of Economics
Publisher
Massachusetts Institute of Technology
Keywords
Economics.
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