Capital structure, equity issues and asymmetric information
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Authors
Miglo, Anton
Wu, Congsheng
Barot, Bhaskarray
Patel, Suraj
Issue Date
2012
Type
Presentation
Language
Keywords
Faculty research day
Alternative Title
Abstract
Description
The financial crisis of 2008-2009 forced financial economists to look critically at capital structure theory because the problems faced by many companies stemmed from their financing policies. This project builds on pecking order theory (POT) of capital structure directly related to asymmetric information. POT is considered as Top 2 most important theories of capital structure. However, it lacks empirical support. The proposed research seeks to examine the effect of long-term asymmetric information on firm's decisions to issue equity and more generally their capital structure policy.We are going to offer a new model of issuing equity in the conditions of asymmetric information where POT emerges as a special case.
Citation
Poster 12