Firms issue debt or equity in primary markets

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In 1983, Stewart Myers raised the question about how market inefficiencies may affect capital structure choices. Pushing these issues a bit further, how do advocates of the “Windows of Opportunity” story suggest how equity and bond market conditions may affect managers’ choices of whether and when to issue debt and equity? What sort of historical evidence do we have that stock and bond market conditions do affect decisions about when the firms issue debt or equity in primary markets?

Reference no: EM132053232

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