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Adjustment of the WACC with Subsidized Debt in the Presence of Corporate Taxes: the N-Period Case
Velez-Pareja, Ignacio; Tham, Joseph; Fernandez, Viviana - EconWPA - 2005
In the Weighted Average Cost of Capital (WACC) applied to the free cash flow (FCF), we assume that the cost of debt is the market, unsubsidized rate. With debt at the market rate and perfect capital markets, debt only creates value in the presence of taxes through the tax shield. In some cases,...
Persistent link: https://www.econbiz.de/10005134868
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Spinoffs, Privatization and Corporate Performance in Emerging Markets
Hanousek, Jan; Kocenda, Evzen; Svejnar, Jan - EconWPA - 2004
We use new firm-level data to examine the effects of spinoffs and privatization on corporate performance in a rapidly … spinoffs increase the firm’s profitability but do not alter its scale of operations, while the effect of privatization … consistent with tunneling (looting) by managers or (partial) owners. The effects of privatization are hence much less clear …
Persistent link: https://www.econbiz.de/10005077066
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Ownership, Control and Corporate Performance after Large-Scale Privatization
Hanousek, Jan; Kocenda, Evzen; Svejnar, Jan - EconWPA - 2004
-scale privatization economy. Using specifications based on first-differences and unique instrumental variables, we find that few types of … private ownership improve dynamic post-privatization performance. Concentrated foreign (but not domestic) ownership improves …
Persistent link: https://www.econbiz.de/10005135012
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Privatization, Corporate Control and Regulatory Reform: The case of Telefonica
Bel, Germa; Trillas, Francesc - EconWPA - 2004
investigates the case of a large privatized firm subject to many policy constraints. The last steps of Telefonica's privatization … documented phenomenon both in this study and in the cross-country literature on privatization; e.g. political ends in … privatization, influence in appointments, golden shares) as the most visible part of such collusion. Liberalization and multi …
Persistent link: https://www.econbiz.de/10005413213
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Corporate Governance as an instrument of change state owned Corporate Governance as an instrument of change state owned companies: The case of the Hellenic Telecommunications Organ...
Spanos, Loukas; Papoulias, Demetrios - EconWPA - 2005
’s case within the international debate regarding the privatization of state-owned companies and the importance of CG … mechanisms as instruments of change. It is argued that the privatization of state-owned companies, when is accompanied with …
Persistent link: https://www.econbiz.de/10005561676
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Optimal Capital Structure and Industry Dynamics
Miao, Jianjun - EconWPA - 2003
This paper presents an equilibrium model of industry dynamics and capital structure decisions. The unique stationary equilibrium is derived in closed-form. The analysis reveals that the interaction between capital structure and production decisions influences the stationary distribution of...
Persistent link: https://www.econbiz.de/10005134424
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The U-shaped Investment Curve: Theory and Evidence
Cleary, Sean; Povel, Paul; Raith, Michael - EconWPA - 2003
This paper examines how the investment of financially constrained firms varies with their level of internal funds. We develop a theoretical model of optimal investment under financial constraints. Our model endogenizes the costs of external funds and allows for negative levels of internal funds....
Persistent link: https://www.econbiz.de/10005413170
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Liquidation Triggers and the Valuation of Equity and Debt
Galai, Dan; Raviv, Alon; Wiener, Zvi - EconWPA - 2003
Net-worth covenants, as introduced by Black and Cox (1976), provide the firm’s bondholders with the right to force reorganization or liquidation if the value of the firm falls below a certain threshold. In the event of default, however, many bankruptcy codes stipulate an automatic stay of...
Persistent link: https://www.econbiz.de/10005561605
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Debt-Deflation: Concepts, and a Stylised Model
Peter, Goetz von - EconWPA - 2005
This paper proposes a model of how agents adjust their asset holdings in response to losses in general equilibrium. By emphasising the relation between deflation and financial distress, we capture some original features of the early debt-deflation literature, such as distress selling,...
Persistent link: https://www.econbiz.de/10005126279
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Bayesian Methods for Improving Credit Scoring Models
Posch Peter N.; Gunter, Loeffler; Christiane, Schoene - EconWPA - 2005
We propose a Bayesian methodology that enables banks to improve their credit scoring models by imposing prior information. As prior information, we use coefficients from credit scoring models estimated on other data sets. Through simulations, we explore the default prediction power of three...
Persistent link: https://www.econbiz.de/10005134954