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Morellec, Erwan; Zhdanov, Alexei - Institut für Schweizerisches Bankwesen <Zürich> - 2006

This paper analyzes the interaction between financial leverage and takeover activity. We develop a dynamic model of …, and takeover terms, in which the bidder with the lowest leverage wins the takeover contest. Based on the resulting … bidder is below the industry average and that acquirers should lever up after the takeover consummation. The model also …

Persistent link: https://www.econbiz.de/10005858240

Personal Taxes, Leverage, and Real Investment

Morellec, Erwan; Schürhoff, Norman - Institut für Schweizerisches Bankwesen <Zürich> - 2007

This paper examines the impact of capital gains taxation on ﬁrms investment and ﬁnancing decisions. We develop a real options model in which the timing of investment, the decision to default, and the ﬁrms capital structure are endogenouslyand jointly determined. Our analysis shows that...

Persistent link: https://www.econbiz.de/10005858029

The Informational Content of Equity Offerings with Rights and Firm Value

Dubois, Michel; Jeanneret, Pierre - Institut für Schweizerisches Bankwesen <Zürich>; … - 2004

The aim of this study is to test whether the relation between the informational content of equity offering announcements and their impact on the firm value depends on the motive of the offering. The use of the proceeds allows differentiating the equity issues according to the theories that...

Persistent link: https://www.econbiz.de/10005858305

What are the Determinants of the Capital Structure? : Some Evidence for Switzerland

Drobetz, Wolfgang; Fix, Roger - Institut für Schweizerisches Bankwesen <Zürich>; … - 2003

We test leverage predictions of the trade-off and pecking order models usingSwiss data. At an aggregate level, leverage of Swiss ﬁrms is comparativelylow, but the results depend crucially on the exact deﬁnition of leverage.Conﬁrming the pecking order model but contradicting the trade-off...

Persistent link: https://www.econbiz.de/10005858714

Capital Gains Taxes, Irreversible Investment, and Capital Structure

Schürhoff, Norman - Institut für Schweizerisches Bankwesen <Zürich> - 2005

This paper studies the corporate policy distortions caused by realization-based capital gains taxation at the personal level in a dynamic trade-off theory model. The lock-in effect of embedded capital gains creates severe conflicts of interest between incumbent and new investors. The firms...

Persistent link: https://www.econbiz.de/10005858786

Capital Structure, Credit Risk, and Macroeconomic Conditions

Hackbarth, Dirk; Miao, Jianjun; Morellec, Erwan - Institut für Schweizerisches Bankwesen <Zürich> - 2004

This paper develops a quantitative framework for analyzing the impact of macroeconomic conditions on credit risk and dynamic capital structure choice. We begin by observing that when cash flows depend on current economic conditions, there will be a benefit for firms to adapt their default and...

Persistent link: https://www.econbiz.de/10005858794

Introducing Capital Structure in a Production Economy : Implications for Investment, Debt and Dividends

Alessandrini, Fabio - Institut für Schweizerisches Bankwesen <Zürich>; … - 2003

This model adds to the standard neoclassical model of business fluctuations by introducing a more realistic capital structure problem, where firms have to balance the tax benefits of debt with the costs of potential financial distress. Therefore, firms solve a dynamic problem with both an...

Persistent link: https://www.econbiz.de/10005859002

Consistent valuation of project finance and LBO'susing the flows-to-equity method

Cooper, Ian; Nyborg, Kjell G. - Institut für Schweizerisches Bankwesen <Zürich> - 2010

A common method of valuing the equity in leveraged transactions is the flows-to-equity method whereby the free cash flow available to equity holders is discounted at the cost of equity. This method uses a standard definition of equity free cash flow, but the cost of equity varies over time as...

Persistent link: https://www.econbiz.de/10009354137

Managerial Ownership and Firm ValueEvidence from Small Firms listed in Germany

Kast, Manuel - Institut für Schweizerisches Bankwesen <Zürich>; … - 2004

Using a new data set of small public firms in Germany, this paper analyzes the incentive and entrenchmenteffects associated witrh mangerial equity owernership. The relationship between firm value and insider ownership is found to be nonlinear: at low levels of ownership firm value is positive...

Persistent link: https://www.econbiz.de/10005857792

Should Financial Institutions own equity? -A Test of the German Bank Influence Model

Kast, Manuel - Institut für Schweizerisches Bankwesen <Zürich>; … - 2004

This paper tests two competing hypotheses about the influence of financial institutions as large shareholders on the performance of their industrial portfolio firms: the superior monitoring hypothesis versus the rent extraction hypothesis. The methodology of this study exploits the abolishment...

Persistent link: https://www.econbiz.de/10005857793