Showing 1 - 10 of 62
their leverage …
Persistent link: https://www.econbiz.de/10012419623
issuer firms expand their total assets and fixed assets, and also raise their leverage …
Persistent link: https://www.econbiz.de/10012614108
We revisit the relation between equity returns and financial leverage through the lens of a trade-off model with costly … returns depend on whether a firm's leverage is above or below its target leverage. The data support the model predictions …. Controlling for leverage, overlevered (underlevered) firms earn higher (lower) returns. Controlling for target leverage the …
Persistent link: https://www.econbiz.de/10011899835
tax benefit of debt (net and gross of investor taxes) and the debt ratio. A 10% increase in the net (gross) marginal tax … also be identified in a partial adjustment model. -- Debt ; capital structure ; marginal tax rate ; corporate taxes … simulate marginal tax rates, we find a statistically and economically significant positive relationship between the marginal …
Persistent link: https://www.econbiz.de/10009625689
This paper deals with both system-wide and banks' internal stress tests. For system-wide stress tests it describes the evolution over time, compares the stress test design in major jurisdictions, and discusses academic research. System-wide stress tests have gained in importance and nowadays...
Persistent link: https://www.econbiz.de/10012534563
A large body of literature finds that managerial overconfidence increases risk-taking by financial institutions. This paper shows that financial regulation can be effective at mitigating this type of risk. Exploiting regulatory changes introduced after the financial crisis as a natural...
Persistent link: https://www.econbiz.de/10014477386
firms rely heavily on equity financing, even though benefits associated with debt (like tax shields) appear to be high and …. Debt, however, has an adverse effect on the enforceability of these arrangements because too much debt increases the firm … analysis provides an explanation for why some firms only use little debt financing. Predictions made by our theory are in line …
Persistent link: https://www.econbiz.de/10011705222
We build a model of investment and financing decisions to study the choice between bonds and bank loans in a firm's marginal financing decision and its effects on corporate investment. We show that firms with more growth options, higher bargaining power in default, operating in more competitive...
Persistent link: https://www.econbiz.de/10010258730
reduce adverse selection and improve the pricing of newly issued debt. Over time, the benefits of learning decrease and zero-leverage …I develop a dynamic model of financing decisions and optimal debt maturity choice in which creditors face adverse … selection and learn about the firm's quality from news. In equilibrium, shareholders may choose to postpone debt issuance to …
Persistent link: https://www.econbiz.de/10011626255
formed and how they impact leverage and debt maturity choices. In the model, lending relationships evolve through repeated … interactions between firms and debt investors. Stronger lending relationships lead firms to adopt higher leverage ratios, issue …Lending relationships matter for firm financing. In a model of debt dynamics, we study how lending relationships are …
Persistent link: https://www.econbiz.de/10012612803