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E. Kim (1978)
A Mean-Variance Theory of Optimal Capital Structure and Corporate Debt CapacityJournal of Finance, 33
Wayne Lee, H. Barker (1977)
Bankruptcy Costs and the Firm's Optimal Debt Capacity: A Positive Theory of Capital StructureSouthern Economic Journal, 43
A. Kraus, R. Litzenberger (1973)
A State-Preference Model of Optimal Financial LeverageJournal of Finance, 28
A. Robichek, S. Myers (1966)
Problems in the Theory of Optimal Capital StructureJournal of Financial and Quantitative Analysis, 1
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THE INSIGNIFICANCE OF BANKRUPTCY COSTS TO THE THEORY OF OPTIMAL CAPITAL STRUCTUREJournal of Finance, 33
L. Troy (1975)
Almanac of Business and Industrial Financial Ratios
James Scott (1976)
A Theory of Optimal Capital StructureThe Bell Journal of Economics, 7
Merton Miller (1977)
DEBT AND TAXESJournal of Finance, 32
Franco Modigliani (1963)
CORPORATE INCOME TAXES AND THE COST OF CAPITAL: A CORRECTION, 53
Jerold Warner (1977)
Bankruptcy Costs: Some EvidenceJournal of Finance, 32
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Corporate Income Taxes, Valuation, and the Problem of Optimal Capital StructureJournal of Business, 51
Turnbull Turnbull (September 1979)
“Debt Capacity.”Journal of Finance, 34
Nevins Baxter (1967)
LEVERAGE, RISK OF RUIN AND THE COST OF CAPITAL*Journal of Finance, 22
D. Wrightsman (1978)
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(1971)
Girth. Bankruptcy: Problem, Process, Reform
The Administrative Costs of Corporate Bankruptcy: A Note JAMES S. ANG, JESS H. CHUA, and JOHN J. MCCONNELL* IN THISPAPER W E present evidence on the direct administrative costs of corporate bankruptcy. The investigation is directed toward providing evidence that may be helpful in answering questions about the role of bankruptcy costs as a determinant of corporate capital structures. The importance of bankruptcy costs as a determinant of corporate financing policy has been extensively debated in the finance literature. The origins of the debate can be traced to Modigliani and Miller [8] and Robichek and Myers [9]. Under the assumption that debt is default-free and interest payments are taxdeductible, Modigliani and Miller demonstrated that firms will maximize their market values by maximizing their use of debt financing. Robichek and Myers demonstrated that this conclusion also holds when debt is not default-free, but bankruptcy is costless. To explain observed corporate debt to total value ratios, which typically fall in the range of 20 percent to 30 percent, Robichek and Myers [9] and Baxter [l] appealed to the existence of bankruptcy costs as a possible counterweight to the tax-deductibility of interest payments. Subsequently, Kraus and Litzenberger [5], Scott [lo], Lee
The Journal of Finance – Wiley
Published: Mar 1, 1982
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