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jranslated_by:: farhad Abdollahzadeh
The objective of this paper is to remind the readers of famous
article by Fischer Black called "The Dividend Puzzle", which starts with "what should corporations do with their dividends?" We do not khow

The capital structure puzzle is more complex than the dividend puzzle. Because we do not know why corporations issue many
different securities. In this article two hypotheses were given:
1- Static tradeoff hypothesis and
2- Pecking order hypothesis.
In static tradeoff hypothesis it is assumed that corporations have a tn_get debt ratio and try to move toward that ratio. In the packing order hypothesis it is assumed that the corporation will


prefer internal financing to external financing and in case of external financing the corporation will prefer debt securities to common stock