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We consider a setting in which insiders have information about income that outside shareholders do not, but property rights ensure that outside shareholders can enforce a fair payout. To avoid intervention, insiders report income consistent with outsiders' expectations based on publicly...
Persistent link: https://www.econbiz.de/10011083832
For many private firms, relationship lending is the only viable form of outside financing. Relationship lending typically relies on intertemporal loan pricing: losses from early years are recovered by information rents in later years, which stem from the lender's private information regarding...
Persistent link: https://www.econbiz.de/10011083940
We incorporate costly external finance in a production based asset pricing model and investigate whether financing frictions are quantitatively important for pricing a cross-section of expected returns. We show that the common assumptions about the nature of the financing frictions are captured...
Persistent link: https://www.econbiz.de/10005497817
incentives to overinvest, lower Tobin’s q, higher return volatility, larger risk premium, and higher interest rate, consistent …
Persistent link: https://www.econbiz.de/10005497980
small default risk. Our model explains why markets for rollover debt, such as asset-backed commercial paper, may experience …
Persistent link: https://www.econbiz.de/10004980204
(CSR) activities. We model CSR activities as an investment in customer loyalty and show that CSR decreases systematic risk …
Persistent link: https://www.econbiz.de/10011083749
Performance evaluation of venture-capital (VC) payoffs is challenging because payoffs are infrequent, skewed, realized over endogenously varying time horizons, and cross- sectionally dependent. We show that standard stochastic discount factor (SDF) methods can be adapted to handle these issues....
Persistent link: https://www.econbiz.de/10011084553
, the greater the liquidation risk. The optimal contract can be implemented by holding cash reserves and by issuing debt and …
Persistent link: https://www.econbiz.de/10005067486
This paper provides a theory of foreign equity investment restrictions. We consider a model where the demand function …. The empirical implications of this theory are supported by evidence from Switzerland. …
Persistent link: https://www.econbiz.de/10005067636
a larger debt capacity and bears lower credit risk premia than privately held debt. We derive simple closed …
Persistent link: https://www.econbiz.de/10005662221