### Table VIII The Relation between Firm Leverage and the Effects of the Release of

### Table A1. Summary of robustness checks performed for logit analysis of low leverage firms and control firms (see also Table 4).

### Table II Average Overhang Correction by Leverage Group This table reports the mean overhang correction across leverage and overhang deciles. In Panel A, all firms were first sorted by leverage. Then, within each leverage decile, firms are sorted by the overhang correction and placed into deciles. Panel B presents groups created by independent sorts of leverage and overhang. The overhang correction is calculated as in Hennessy and Whited (2005) as

2006

### Table 1: Descriptive Statistics for Leverage SIC Code Description Nobs Obs # Firms Mean Std Dev Min Max

"... In PAGE 14: ... There is a slight long left tail and peaked shape to most of the histograms, however, the normality assumption implicit in (7) o ers a reasonable approximation. Table1 presents summary statistics for leverage at the industry level. The \Nobs quot; column lists the number of observations while the \Obs quot; column lists the number of non- missing observations.... ..."

### Table VI. Operating performance and financial leverage of bailed out connected and non-connected firms and their matching peers

### Table 1: Descriptive Statistics for All Variables This table reports the descriptive statistics for both leverage variables and each of the determinants. The data set contains 18597 firms from 1965 to 2006 reported in COMPUSTAT. Under All Firms, we include firms with non-missing data for both leverages and determinants in a year. The Survived firms are in the subsample of firms required to have at least 10 years of consecutive records. 5% and 95% represents the lower and upper 5% percentile, respectively. Variable definition can be found in the Appendix. All Firms Survived Firms

2007

"... In PAGE 19: ...Table1 for the total data set as well as for the subset of survived firms. Insert Table 1 Approximately Here The mean values and standard deviations of the variables closely resemble those reported in Lemmon, Roberts and Zender.... In PAGE 19: ...Insert Table1 Approximately Here The mean values and standard deviations of the variables closely resemble those reported in Lemmon, Roberts and Zender. For interpretation of our results, it is useful to observe that market leverage is on average 25% more volatile than book leverage.... In PAGE 19: ... Thus, we expect our results to be generally more significant for market leverage than book leverage. In Table1 , we also report the 5th and the 95th percentiles and the median value for each variable. According to these statistics, both book leverage and market leverage are somewhat skewed to the right.... In PAGE 51: ...Table1 0: Comparison of Out-of-sample Prediction for Leverage This table reports the out-of-sample prediction measured by root-mean-squared-error for both book leverage and market leverage using different models. The data set contains 4955 firms and 4766 firms when using book leverage and market leverage, respectively, from 1965 to 2006.... ..."

### Table 14: Average basis in sub-sets sorted by trading volume and leverage: This table shows the average CDS-bond basis in a sample of around 14,600 bond-quarter observations for 5,792 bonds issued by 1,167 firms for the period from July 2002 to June 2006. For every quarter, the data are sorted along two dimensions into five groups in increasing order of the volume traded for that quarter and further in increasing order the leverage of the firms issuing the bonds. The numbers in the table are the means computed for each sub-group. Figures in parentheses are clustered standard errors for the mean, where the clustering is by individual bond.

2007

### Table 1. Sample size, ratio of long-term debt to total assets and other measures of debt. Firms are selected from public, domestic firms with both CRSP and Compustat data and real total assets greater than $100 million in 1998 dollars. Financial service firms and utilities are eliminated. Firms are assigned to panels based on survivorship and leverage during five non-overlapping five-year periods ending in the years 1978, 1983, 1988, 1993 and 1998. A firm is assigned to a low leverage panel if its ratio of long-term debt to total assets falls in the bottom 20% of all firms for each of the five panel years. Control firms are other firms that survive for the corresponding five-year period. Long-term debt includes the current portion of long-term debt. Industry adjustments are made on an annual basis using medians for each variable based on two-digit Compustat SIC codes. All firms, regardless of their survivorship or leverage characteristics, are used in computing industry medians; this utilizes a total of 46,675 firm years of data. Statistics are computed in the following sequence: 1) the mean (median) for each firm within a panel, 2) the mean (median) across firms within a panel, 3) the mean (median) across panels. T-tests assuming unequal variances are used to compare means and a Wilcoxon ranked sign test is used to compare medians. ** (*) denotes significance at the 1% (5%) level. NM is not meaningful.

"... In PAGE 6: ...2. Sample statistics and measures of leverage Table1 reports descriptive statistics for the low leverage and control samples. Statistics presented are based on the five non-overlapping panels, but results are similar utilizing statistics from the 21 overlapping panels.... ..."

### Table 3 summarizes the descriptive statistics for firms that switch to Tier 1 audit firms and those that switched to Tier 2 audit firms. The results are the mean differences of the following variables: turnover growth, asset size, growth of asset, leverage, return on asset, financing activities and average acquisition to total asset. The are some noticeable differences. The average turnover growth of firms that switched to Tier 1 auditor are comparatively higher than firms that switched to Tier2 auditor recording 54% and 45% respectively, 2 years preceding the auditor change. Meanwhile, the average asset growth before the auditor change for firms that switched to Tier1 audit firms is higher than firms that switched to Tier2 audit firms, recording at 50.6% and 41% respectively. And the size of the asset for client firms that switch to Tier 1 are significantly larger than firms that switched to Tier 2 audit firms. The average acquisition before the auditor switch is recorded 7.9 % for firms switching to Tier1 audit firms and 5.39% for firms that switched to Tier 2 audit firms. Furthermore, firms that switched to Tier1 auditor exhibited higher leverage than those

in The Auditor Switch Decision of Malaysian Listed Firms: An Analysis of Its Determinants Wealth Effect

### Table 7. Correlations of Leverage and Financial Indicators

"... In PAGE 19: ... Similarly, the M3/GDP, which has been used as a measure of the size of the banking sector is not correlated with financing choices of firms. Inserr Table7 here Financial market developmem as a determinant offirm capital structure While the simple correlations between debt and the level of the stock market and the banking sector suggest that equity is a substinue for both short-term and long-term debt financing, they do not take into account other determinants of firms apos; financing choices identified in the previous section. Thus, for example, the observed correlarions may be the result of differences in industry composition, in tax regimes and growth rates and macro-factors.... ..."