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The Cross-Section of Hurdle Rates for Capital Budgeting : An Empirical Analysis of Survey Data
Jagannathan, Ravi - 2011
Whereas Poterba and Summers (1995) find that firms use hurdle rates that are unrelated to their CAPM betas, Graham and Harvey (2001) find that 74% of their survey firms use the CAPM for capital budgeting. We provide an explanation for these two apparently contradictory conclusions. We find that...
Persistent link: https://www.econbiz.de/10012461887
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Market Liquidity and Funding Liquidity
Brunnermeier, Markus K. - 2007
We provide a model that links an asset's market liquidity - i.e., the ease with which it is traded - and traders' funding liquidity - i.e., the ease with which they can obtain funding. Traders provide market liquidity, and their ability to do so depends on their availability of funding....
Persistent link: https://www.econbiz.de/10012465717
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Financing Durable Assets
Rampini, Adriano A. - 2016
This paper studies the effect of durability on the financing of durable assets. We show that more durable assets … the price of an asset and hence the overall financing need more than its collateral value. This insight has implications … dominated technologies. More durable assets are more likely to be rented given their larger financing need. Legal enforcement …
Persistent link: https://www.econbiz.de/10012271598
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Equilibrium Corporate Finance and Intermediation
Bisin, Alberto - 2014
frictions. Firms take their production, financing, and contractual decisions so as to maximize their value under rational …
Persistent link: https://www.econbiz.de/10012458322
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Financing as a Supply Chain : The Capital Structure of Banks and Borrowers
Gornall, William - 2013
We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage emerges naturally from the interplay between two sets of forces. First, seniority and diversification reduce bank asset volatility by an order of magnitude relative to that of...
Persistent link: https://www.econbiz.de/10012459028
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Adverse Selection In Credit Markets and Regressive Profit Taxation
Scheuer, Florian - 2012
In many countries, taxes on businesses are less progressive than labor income taxes. This paper provides a justification for this pattern based on adverse selection that entrepreneurs face in credit markets. Individuals choose between becoming entrepreneurs or workers and differ in their skill...
Persistent link: https://www.econbiz.de/10012460254
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Which Financial Frictions? Parsing the Evidence from the Financial Crisis of 2007-9
Adrian, Tobias - 2012
suggests that although bank lending to firms declines during the crisis, bond financing actually increases to make up much of …
Persistent link: https://www.econbiz.de/10012460315
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All Banks Great, Small, and Global : Loan pricing and foreign competition
de Blas, Beatriz - 2010
Can allowing foreign participation in the banking sector increase real output, despite the imperfectly competitive nature of the industry? Using a new model of heterogeneous, imperfectly competitive lenders and a simple search process, we show how endogenous markups (the net interest margin...
Persistent link: https://www.econbiz.de/10012462623
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Screening Peers Softly : Inferring the Quality of Small Borrowers
Iyer, Rajkamal - 2009
The recent banking crisis highlights the challenges faced in credit intermediation. New online peer-to-peer lending markets offer opportunities to examine lending models that primarily cater to small borrowers and that generate more types of information on which to screen. This paper evaluates...
Persistent link: https://www.econbiz.de/10012463407
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The creation of the rule of law and the legitimacy of property rights : the political and economic consequences of a corrupt privatization
Hoff, Karla Ruth - 2005
"How does the lack of legitimacy of property rights affect the dynamics of the creation of the rule of law? We investigate the demand for the rule of law in post-Communist economies after privatization under the assumption that theft is possible, that those who have "stolen" assets cannot be...
Persistent link: https://www.econbiz.de/10010522421