- مبلغ: ۸۶,۰۰۰ تومان
- مبلغ: ۹۱,۰۰۰ تومان
The median U.S. non-regulated firm reports a 47% decline in leverage ratio between 1980 and 2010. We investigate whether the cost-benefit tradeoff to shareholders, captured by the valuation impact of an additional dollar of debt on owners' equity, is an explanation for the observed change in leverage. Using Faulkender and Wang (2006) methodology, we find that shareholders view increasing debt to have a negative impact on their wealth, that is, shareholders perceive firms to be over-levered. Further, the net cost of issuing additional debt has increased steadily for three decades beginning in 1980 before declining marginally after 2010. This trend holds for different groups of firms classified on factors known to affect capital structure decisions. Managers respond to the changing cost to shareholders by reducing (increasing) leverage when the cost of debt increases (decreases). The time-series pattern in the marginal cost of debt persists after controlling for firm-specific characteristics. We find that macroeconomic factors, such as federal debt, play a role in explaining the marginal value of debt.
There has been a persistent decline in long-term leverage ratios among non-financials and unregulated U.S. firms between 1980 and 2010. The median (average) firm reports a decrease in debt-to-asset ratio of about 47 (29) percent over the interval, falling from 25.10 (26.78) percent in 1980 to 13.39 (19.04) percent in 2010. While there is a subsequent marginal increase in leverage until 2014, the ratios are significantly lower than those in the 1980 to 2000 interval. The pattern is pervasive and is observed for firms classified by leverage or by other factors that the literature has shown to affect capital structures. This general trend contradicts the conclusion of theoretical models of Graham (2000) and Binsbergen et al. (2010) that firms are under-levered and should be increasing leverage to maximize firm value but support the empirical findings of Michaely et al. (2017) and Kahle and Stulz (2017). We investigate whether the time-series trend in leverage can be explained by the cost-benefit tradeoff of debt to shareholders. We argue that this approach provides a more comprehensive analysis than the one taken by previous studies that examine this issue from the firm's viewpoint because equity holders are expected to incorporate all of the costs and benefits of debt in determining the net valuation impact of increasing debt. Using a methodology similar to Faulkender and Wang (2006), we estimate the value that a firm's owners assign to an incremental dollar of debt.