The Impact of Speculation on  Firms' Capital Structure

Lépinette, Emmanuel; Aboura, Sofiane

Lépinette, Emmanuel; Aboura, Sofiane (2013), The Impact of Speculation on Firms' Capital Structure. https://basepub.dauphine.fr/handle/123456789/12513

Type

Document de travail / Working paper

External document link

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2372790

Date

2013

Publisher

Université Paris-Dauphine

Published in

Paris

Metadata

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Author(s)

Lépinette, Emmanuel

Aboura, Sofiane

Abstract (EN)

Modigliani and Miller (1958) suppose that "nothing is involved in the way of specific assumptions about investor attitudes or behavior other than that investors behave consistently and prefer more income to less income, ceteris paribus." Moreover, it is assumed that arbitrage opportunities may only occur in presence of two firms having distinct values but same pro file. The natural question is why such investors dismiss speculative opportunities between firms having same values with distinct capital structures?

Subjects / Keywords

Regulation; Markowitz; Modigliani-Miller; Capital Structure; Speculation

JEL

D84 - Expectations; Speculations
G28 - Government Policy and Regulation
G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
G3 - Corporate Finance and Governance