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Debt conservatism and debt-equity choices: evidence from REITs’ unused debt capacity


Wong, Woei Chyuan (2017) Debt conservatism and debt-equity choices: evidence from REITs’ unused debt capacity. The International Journal of Banking and Finance, 13 (1). pp. 1-28. ISSN 1617-722

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Abstract

We infer debt conservatism behavior by examining how REITs adjust towards their debt capacity following a capital issue or repurchase decision. It is observed that REITs with high unused debt capacity tend to issue equity which renders them more under lever aged for at least two consecutive years. These high debt buffer REITs also tend to converge slowly towards their debt capacity through repurchase decisions and hold significantly higher unused debt facilities than their low buffer counterparts. These findings are robust to a variety of robustness checks and cannot be explained by the traditional pecking order and trade-off theories of capital structure.

Item Type: Article
Uncontrolled Keywords: Capital structure, Financial flexibility, Unused debt capacity, REIT
Subjects: H Social Sciences > HG Finance
Divisions: School of Economics, Finance & Banking
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 25 Jul 2019 02:58
Last Modified: 25 Jul 2019 02:58
URI: http://repo.uum.edu.my/id/eprint/26255

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