Zero-Debt Policy under Asymmetric Information, Flexibility and Free Cash Flow Considerations
We build a model of debt for firms with investment projects, for which flexibility and free cash flow problems are important issues. We focus on the factors that lead the firm to select the zero-debt policy. Our model provides an explanation of the so-called “zero-leverage puzzle”. It also helps to...
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| Format: | Article |
| Language: | English |
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MDPI AG
2020-11-01
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| Series: | Journal of Risk and Financial Management |
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| Online Access: | https://www.mdpi.com/1911-8074/13/12/296 |