Jaewon Choi is Assistant Professor of Finance at the University of Illinois at Urbana-Champaign; Dirk Hackbarth is Professor of Finance at Boston University Questrom School of Business; and Josef Zechner is Professor of Finance at Vienna University of Economics and Business. This post is based on a recent article, forthcoming in the Journal of Financial Economics, by Professor Choi, Professor Hackbarth, and Professor Zechner.
The article Corporate Debt Maturity Profiles, forthcoming in the Journal of Financial Economics, studies a novel aspect of a firm’s capital structure, namely the dispersion of debt maturities. Extant literature offers little guidance on this aspect of capital structure, and lack of evidence is at variance with practitioners emphasizing that rollover risk affects debt maturity choice. Surveys of financial managers often suggest that avoiding so-called “maturity towers” (i.e. spreading debt maturity dates over time) is a key factor when firms choose debt maturities.
