Security Choice, Information Effects and Firm Characteristics: A Factor Analytic Approach
用因子分析方法研究公司债务与权益证券的边际选择，发现静态权衡和不对称信息因素都起作用，并揭示公司流动性对股权偏好及市场反应的影响。
Abstract: We examine the marginal choice between debt and equity securities using a factor analytic approach. This data reduction property eliminates the need to select the one best variable to proxy for a particular theoretical construct. Our results reinforce numerous existing findings using traditional methods and suggest both static tradeoff and asymmetric information based considerations are relevant in determining security choice. Two new results are presented related to the accounting liquidity of the firm. First, the preference for equity is increasing with liquidity as suggested by the window of opportunity hypothesis. Secondly, the market response to equity issuance announcements is inversely related to the liquidity of the firm. Profitability and growth measures support Jensen’s (1986) agency cost of free cash flow as a potential explanation for the second finding.