... the joint effect of adjustment costs and cash flows on observed leverage adjustments. 1. INTRODUCTION ADJUSTMENT 5/17 1. INTRODUCTION FIRST EX LEVERAGE TARGET TARGET CURRENT start ... adjustment costs and cash flows on observed leverage adjustments. 9/17 1. INTRODUCTION Some previous researchers have investigated the impact of these adjustment cost proxies on target leverage ... Hovakimian, Opler, and Titman, 2001; Korajczyk and Levy, 2003; Leary and Roberts, 2005). However, we are the first to interact adjustment speed measures with cash flows, and thus evaluate...