this paper explores the leverage determinants across firms’ sizesbased on the two main theories behind the capital structure, the trade-offand the pecking order theories. a panel data is sued to find therelationship between capital structure and the variables that proxy forbenefits and costs of debt during 1990 to 2006. our findings show thatboth principles help to explain the capital structure...

We analyze the optimal contract to finance the series of investments of a growing firm. The analysis is based on the need to repeatedly raise funds when informed insiders can expropriate outside investors. The optimal contract can be implemented by a sequence of one-period debt contracts and equity ownership by outsiders. Debt is optimal, as it reduces the expected cost of auditing, while parti...

In this paper, the study attempts to determine the optimal capital investment in setup cost reduction and optimal lot sizing policies for an economic order quantity (EOQ) model with random yields. The setup cost is treated as the function of capital expenditure in technology. The study shows that the expected total annual cost functions with capital investment is convex and develop a solution p...

making decision about capital structure is one of the hardest and challengeable problems for the companies, and also it is the greatest importance decision about their permanence. this paper investigates factors affecting capital structure among 70 samples of small business in ahwaz. data was gathered from accounting evidences and data questioners. parametric and nonparametric statistical techn...

With the drafting of new banking regulation via the Basel II capital accord, bank regulatory capital and its adequacy has become the subject of much debate. In our contribution, we strive to construct a stochastic dynamic model to describe the evolution of bank capital that incorporates capital gains and losses. In our paper, such gains and losses are represented by loan loss reserves and the u...