Re-visiting the Determinants of Target Debt Ratio, the Role of the Sarbanes-Oxley (SOX) Act and Speed of Adjustment: An Empirical Study on U.S. Public Listed Firms

This thesis empirically investigates whether the CEO characteristics, asset volatility and investor sentiment are important determinants of the target debt ratio (TDR) using the partial adjustment model on a sample of U.S. listed firms. Additionally, this thesis inquires how the change in regulation (i.e., Sarbanes-Oxley Act or SOX) affects the firms' optimal capital structure decisions. Furthermore, this thesis documents whether market events and factors such as SOX and investor sentiment impact firms' speed of adjustment (SOA) towards the TDR. The findings from this thesis contribute to the existing literature and are beneficial to various individuals or market participants.