Abstract
According to Graham and Harvey (2001), an immense gap exists between capital structure theories and practice. By analyzing students’ perception of capital structure theories and the differences between their opinion and that of the current CEO’s and managers this paper argues that this can be partially explained by current educational practices. Educators mostly focus on one or maybe two most popular theories and students have much smaller knowledge about other theories. Secondly educational practices favor trade-off theory to asymmetric information based theories. The paper provides some suggestions regarding capital structure education and future research.
Keywords
- Capital Structure Education Search this journal for Capital Structure Education (opens in a new tab)
- Trade-off Theory Search this journal for Trade-off Theory (opens in a new tab)
- Pecking-Order Theory Search this journal for Pecking-Order Theory (opens in a new tab)
- Shareholders-Bondholders Conflict Search this journal for Shareholders-Bondholders Conflict (opens in a new tab)
- Life Cycle Theory Search this journal for Life Cycle Theory (opens in a new tab)
- Flexibility Theory Search this journal for Flexibility Theory (opens in a new tab)
- Debt Search this journal for Debt (opens in a new tab)
- Discipline Search this journal for Discipline (opens in a new tab)
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Keywords
- Capital Structure Education Search this journal for Capital Structure Education (opens in a new tab)
- Trade-off Theory Search this journal for Trade-off Theory (opens in a new tab)
- Pecking-Order Theory Search this journal for Pecking-Order Theory (opens in a new tab)
- Shareholders-Bondholders Conflict Search this journal for Shareholders-Bondholders Conflict (opens in a new tab)
- Life Cycle Theory Search this journal for Life Cycle Theory (opens in a new tab)
- Flexibility Theory Search this journal for Flexibility Theory (opens in a new tab)
- Debt Search this journal for Debt (opens in a new tab)
- Discipline Search this journal for Discipline (opens in a new tab)
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