"... In PAGE 29: ...parameters were chosen to match the first and tenth-order autocorrelation of the residuals and the independent variables from the capital structure regression which I examine in Section VI (see Table7 ). These autocorrelations are graphed in Figure 10-A.... In PAGE 40: ... In the asset pricing example, these standard errors were identical to the standard errors clustered by time, since there was no firm effect (Table 6). In the corporate finance example, they were identical to the standard errors clustered by firm, since the time effect is small ( Table7 ). This pattern may not generalize.... In PAGE 40: ... Thus the standard errors clustered by firm and time can be a useful robustness check (see Cameron, Gelbach, and Miller, 2006 for an example). The Fama-MacBeth standard errors ( Table7 , column V) are close to the standard errors clustered by year and the White standard errors. For example, the Fama-MacBeth t-statistic on the profit margin is -3.... In PAGE 42: ... By comparing the different standard errors, one can quickly observe the presence and magnitude of a firm and/or a time effect. As we saw in Section VI, when the standard errors clustered by firm are much larger than the White standard errors (three to four times larger), this indicates the presence of a firm effect in the data (see Table7 ). When the standard errors clustered by time are much larger than the White standard errors (two to four times larger), this indicates the presence of a time effect in the data (see Table 6).... In PAGE 45: ...B) Corporate Finance Application. The data for the regressions in Table7 are constructed from Compustat and include data from 1965 to 2003. The dependent variable, the market debt ratio, is defined as the book value of debt (data9 + data34) divided by the sum of the book value of assets (data6) minus the book value of equity (data60) plus the market value of equity (data25 * data199).... ..."

"... In PAGE 7: ... 3. Data Table1 describes the fields of an excel file which contains the raw data. The data can be obtained at: http://faculty.... In PAGE 7: ... Each column is a coded response to a question. Table1 exactly reproduces the wording that was used on the survey (including same emphasis, line breaks, and fonts). The first column in Table 1 lists the column field in the main excel datasheet.... In PAGE 7: ...ach row in the matrix represents a respondent. Each column is a coded response to a question. Table 1 exactly reproduces the wording that was used on the survey (including same emphasis, line breaks, and fonts). The first column in Table1 lists the column field in the main excel datasheet. The second column lists the items or specific responses to particular questions.... In PAGE 10: ...Table1 (continued) Question 3 Survey responses to the question: Does your firm estimate the cost of equity capital? __Yes __No (If no, please skip to #4) If quot;yes, quot; how do you determine your firm apos;s cost of equity W Yes or No Yes=1, No=0, 9=missing Xa) with average historical returns on common stock 0-4, 9=missing Y b) using the capital asset pricing model (CAPM, the quot;beta quot; approach) 0-4, 9=missing Z c) using the CAPM but including some extra risk factors 0-4, 9=missing AA d) whatever our investors tell us they require 0-4, 9=missing AB e) by regulatory decisions 0-4, 9=missing AC f) back out from discounted dividend/earnings model, e.... In PAGE 11: ...Table1 (continued) Question 5 What factors affect your firm apos;s choice between short- and long-term debt? AP a) we issue short-term when short-term interest rates are low compared to long-term rates 0-4, 9=missing AQ b) matching the maturity of our debt with the life of our assets 0-4, 9=missing AR c) we issue short-term when we are waiting for long-term market interest rates to decline 0-4, 9=missing AS d) we borrow short-term so that returns from new projects can be captured more fully by shareholders, rather than committing to pay long-term profits as interest to debtholders 0-4, 9=missing AT e) we expect our credit rating to improve, so we borrow short- term until it does 0-4, 9=missing AU f) borrowing short-term reduces the chance that our firm will want to take on risky projects 0-4, 9=missing AV g) we issue long-term debt to minimize the risk of having to refinance in bad times 0-4, 9=missing AW h) Other 9=missing Question 6 What is your firm apos;s approximate (trailing) Price/Earnings ratio over the past 3 years? ______ (e.g.... In PAGE 12: ...Table1 (continued) Question 9 Has your firm seriously considered issuing convertible debt? ____ Yes ____ No (if quot;no quot;, please skip to #10) If quot;yes, quot; what factors affect your firm apos;s decisions about issuing convertible debt? BG Yes or No Yes=1, No=2, 9=missing BH a) convertibles are an inexpensive way to issue quot;delayed quot; common stock 0-4, 9=missing, -1=if answered quot;no quot; BI b) protecting bondholders against unfavorable actions by managers or stockholders 0-4, 9=missing, -1=if answered quot;no quot; BJ c) convertibles are less expensive than straight debt 0-4, 9=missing, -1=if answered quot;no quot; BK d) other firms in our industry successfully use convertibles 0-4, 9=missing, -1=if answered quot;no quot; BL e) avoiding short-term equity dilution 0-4, 9=missing, -1=if answered quot;no quot; BM f) our stock is currently undervalued 0-4, 9=missing, -1=if answered quot;no quot; BN g) ability to call or force conversion of convertible debt if/when we need to 0-4, 9=missing, -1=if answered quot;no quot; BO h) to attract investors unsure about the riskiness of our company 0-4, 9=missing, -1=if answered quot;no quot; BP i) Other 9=missing Question 10 Has your firm seriously considered issuing common stock? ____ Yes ____ No (if quot;no quot;, please skip to #11) If quot;yes, quot; what factors affect your firm apos;s decisions about issuing common stock? BQ Yes or No Yes=1, No=2, 9=missing BR a) if our stock price has recently risen, the price at which we can sell is high 0-4, 9=missing, -1=if answered quot;no quot; BS b) stock is our least risky source of funds 0-4, 9=missing, -1=if answered quot;no quot; BT c) providing shares to employee bonus/stock option plans 0-4, 9=missing, -1=if answered quot;no quot; BU d) common stock is our cheapest source of funds 0-4, 9=missing, -1=if answered quot;no quot; BV e) maintaining a target debt-to-equity ratio 0-4, 9=missing, -1=if answered quot;no quot; BW f) using a similar amount of equity as is used by other firms in our industry 0-4, 9=missing, -1=if answered quot;no quot; BX g) whether our recent profits have been sufficient to fund our activities 0-4, 9=missing, -1=if answered quot;no quot; BY h) issuing stock gives investors a better impression of our firm apos;s prospects than issuing debt 0-4, 9=missing, -1=if answered quot;no quot; BZ i) the capital gains tax rates faced by our investors (relative to tax rates on dividends) 0-4, 9=missing, -1=if answered quot;no quot; CA j) diluting the holdings of certain shareholders 0-4, 9=missing, -1=if answered quot;no quot; CB k) the amount by which our stock is undervalued or overvalued by the market 0-4, 9=missing, -1=if answered quot;no quot; CC l) inability to obtain funds using debt, convertibles, or other sources 0-4, 9=missing, -1=if answered quot;no quot; CD m) earnings-per-share dilution 0-4, 9=missing, -1=if answered quot;no quot; CE n) Other... In PAGE 13: ...Table1 (continued) Question 11 Does your firm have a target range for your debt ratio? CF 1=no target; 2=flexible target range; 3; somewhat tight target range; 4=strict target range; 9=missing Question 12 What factors affect how you choose the appropriate amount of debt for your firm? CG a) the tax advantage of interest deductibility 0-4, 9=missing CH b) the potential costs of bankruptcy, near-bankruptcy, or financial distress 0-4, 9=missing CI c) the debt levels of other firms in our industry 0-4, 9=missing CJ d) our credit rating (as assigned by rating agencies) 0-4, 9=missing CK e) the transactions costs and fees for issuing debt 0-4, 9=missing CL f) the personal tax cost our investors face when they receive interest income 0-4, 9=missing CM g) financial flexibility (we restrict debt so we have enough internal funds available to pursue new projects when they come along) 0-4, 9=missing CN h) the volatility of our earnings and cash flows 0-4, 9=missing CO i) we limit debt so our customers/suppliers are not worried about our firm going out of business 0-4, 9=missing CP j) we try to have enough debt that we are not an attractive takeover target 0-4, 9=missing CQ k) if we issue debt our competitors know that we are very unlikely to reduce our output 0-4, 9=missing CR l) a high debt ratio helps us bargain for concessions from our employees 0-4, 9=missing CS m) to ensure that upper management works hard and efficiently, we issue sufficient debt to make sure that a large portion of our cash flow is committed to interest payments 0-4, 9=missing CT n) we restrict our borrowing so that profits from new/future projects can be captured fully by shareholders and do not have to be paid out as interest to debtholders 0-4, 9=missing CU o) Other... In PAGE 14: ...Table1 (continued) Question 13 What other factors affect your firm apos;s debt policy? CV a) we issue debt when our recent profits (internal funds) are not sufficient to fund our activities 0-4, 9=missing CW b) using debt gives investors a better impression of our firm apos;s prospects than issuing common stock 0-4, 9=missing CX c) we issue debt when interest rates are particularly low 0-4, 9=missing CY d) we use debt when our equity is undervalued by the market 0-4, 9=missing CZ e) we delay issuing debt because of transactions costs and fees 0-4, 9=missing DA f) we delay retiring debt because of recapitalization costs and fees 0-4, 9=missing DB g) changes in the price of our common stock 0-4, 9=missing DC h) we issue debt when we have accumulated substantial profits 0-4, 9=missing DD i) Other 9=missing Question 14 What is your firm apos;s approximate long-term debt/total assets ratio? _______% (e.g.... In PAGE 15: ...Table1 (continued) Question 15 (continued) DK Regulated Utility 1= Yes; 2=No; 9=missing DL If all options were exercised, what percent of common stock would be owned by the top three officers? 1= lt;5% 2= 5-10% 3= 10-20% 4= gt;20%; 9=missing DM CEO education 1= Undergraduate 2= MBA 3= non-MBA masters 4= gt;Masters degree; 9=missing DN Age of CEO 1= lt;440 2= 40-49 3= 50-59 4= gt;60; 9=missing DO CEO tenure (time in current job) 1= lt;4 years 2= 4-9 years... ..."

"... In PAGE 23: ...20 With regard to the uses of funds, gross fixed assets accounted for about 54 percent of the total uses of funds by these firms. (iii) A comparison It is interesting to compare these findings for India with that of Singh (1995), shown in Table5 . In general, Singh (1995) found that, compared to firms in advanced countries, firms in developing countries financed the growth of net assets from internal sources to a far smaller degree.... ..."

"... In PAGE 28: ... paper back-ups. In addition, finance companies are involved in very few commercial Table12 shows a breakdown of finance company loan purposes by finance company parent type. While finance subsidiaries of nonfinancial corporations make a smaller fraction of loans in the general corporate purpose/ working capital category than other finance companies, generally speaking, all the subsidiary types appear to make loans for a variety of purposes.... ..."