Three essays on empirical corporate finance

This dissertation is comprised of three essays in empirical corporate finance and in particular on issues related to corporate debt management. The first essay examines corporate motives for repurchasing outstanding debt. I present an agency model of debt demonstrating that when a firm faces a debt overhang, the value of a debt reduction can outweigh the repurchase cost and increase the welfare of all claimholders. Empirically, I find that firms are more likely to repurchase outstanding debt when potential transfers to bondholders are high. I also observe significant increases in firm investment levels and efficiency for repurchasing firms relative to a control sample.;The second essay follows up on the first by investigating whether debt repurchase activity is consistent with the existence of an optimal capital structure. I find that the timing and size of debt repurchases are consistent with trade-off theories of capital structure. Specifically, the likelihood and size of debt repurchases is increasing in a firm's deviation from its estimated target. The positive abnormal returns around the announcement of repurchases are increasing in the deviation from the target debt level, consistent with an optimal capital structure.;The final essay examines how firms structure debt contracts. Debt securities differ on a number of dimensions, including quality, maturity, seniority, security, and convertibility. The empirical results suggest that there are three main types of factors that determine these features: First, firm-specific factors such as growth opportunities and cash holdings are related with the various features of issued bonds. Second, the state of the macroeconomy affects the quality distribution of securities offered; in particular, during recessions, firms issue far less poor quality bonds than in good times. Controlling for firm characteristics and economy-wide factors, project specific factors appear to influence the types of securities that are issued. Specifically, long-term bonds are more likely to be issued by firms investing in fixed assets, while convertible and short-term bonds are more likely to finance investment in R&D.