FIRM CHARACTERISTICS AND PARTIAL ADJUSMENT TOWARD TARGET CAPITAL STRUCTURE

Abstract

The principal objective of this article is to investigate the adjustment process toward target capital structure and analyze the impact of well-know firm characteristic variables on the speed of adjustment toward target debt ratio. Specifically, firms that tend to undertake quick adjustment have high profitability, low growth opportunities, limited tangible assets and small size, and then suggest some implication for the target to maximize firm value.