Theory and Evidence. The Journal of Financial Economics 39, 857–878. A. The major objective of the paper

QUESTIONS ON PAPERS TO BE DISCUSSED
FALL 2019
Bradley, Michael, Jarrell, Gregg A. and Kim, E. Han. 1984, On the Existence of an Optimal Capital Structure:
Theory and Evidence. The Journal of Financial Economics 39, 857–878.
A. The major objective of the paper.
B. What motivates the authors to take up this project?
C. What do they find?
D. What explanations do they offer in support of their findings?
Masulis, Ronald W. 1980. The Effects of Capital Structure Change on Security Prices: A Study of Exchange
Offers, Journal of Financial Economics, 8, 139-178.
A. What is the principal objective of the paper?
B. Why are exchange offers considered as a “pure” test of capital structure theories?
C. What three competing hypotheses does the author test in this paper? What rationale does each of the
hypotheses offer regarding market reactions to exchange offers?
D. Which one, if any, presents the best explanation?
E. What are the primary conclusions?
Myers, Stewart C. 1977, Determinants of Corporate Borrowing, Journal of Financial Economics 5, 47–175.
A. What is the determinant that Myers propose in this paper?
B. How does the determinant compare with other determinants that have been proposed in the literature?
C. How does the author apply option pricing model to debt financing?
D. How does the author go about supporting the proposed determinant?
E. How does the model explain the practice of matching maturities of assets and debt liabilities?
F. Major contributions of the paper.