The Impact of Speculation on Firms' Capital Structure
Lépinette, Emmanuel; Aboura, Sofiane (2013), The Impact of Speculation on Firms' Capital Structure. https://basepub.dauphine.fr/handle/123456789/12513
TypeDocument de travail / Working paper
External document linkhttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=2372790
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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 / KeywordsRegulation; Markowitz; Modigliani-Miller; Capital Structure; Speculation
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