TY - UNPD A1 - Brennan, Michael J. A1 - Kraft, Holger T1 - Leaning against the wind: debt financing in the face of adversity T2 - SAFE working paper series ; No. 119 N2 - We offer evidence of a new stylized feature of corporate financing decisions: the tendency of managers to rely more on debt financing when earnings prospects are poor. We term this 'leaning against the wind' and consider three possible explanations: market timing, precautionary financing, and 'making the numbers'. We find no evidence in favor of the first two hypotheses, and provisionally accept the 'making the numbers' hypothesis that managers who are under pressure because of unrealistically optimistic earnings expectations by analysts and deteriorating real opportunities, will rely more heavily on debt financing to boost earnings per share and return on equity. T3 - SAFE working paper - 119 KW - capital structure KW - financing policy KW - managerial incentives Y1 - 2015 UR - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/38658 UR - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-386581 UR - http://ssrn.com/abstract=2696886 IS - October 30, 2015 PB - SAFE CY - Frankfurt am Main ER -