Capital Structure Decisions and the Optimal Design of Corporate Market Debt Programs

Andrea Tarelli, Lionel Martellini, Vincent Milhau

Risultato della ricerca: Contributo in rivistaArticolo in rivista

7 Citazioni (Scopus)

Abstract

This paper provides a joint quantitative analysis of capital structure decisions (debt versus equity) and debt structure decisions (fixed-rate debt versus floating-rate debt or inflation-linked debt) in a continuous-time setting. We show that optimizing the debt structure has an impact on capital structure decisions, and leads to increases in leverage ratios compared to a pure fixed-rate debt program. We also find that for realistic parameter values, jointly optimizing the debt and capital structures generates a significant increase in firm value with respect to a situation where only the capital structure is optimized.
Lingua originaleEnglish
pagine (da-a)141-167
Numero di pagine27
RivistaJournal of Corporate Finance
Volume49
DOI
Stato di pubblicazionePubblicato - 2018

Keywords

  • Capital structure
  • Debt structure
  • Inflation risk
  • Interest rate risk

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