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Disagreement and flexibility : a theory of optimal security issuance and capital structure

Boot, Arnoud W. A.; Thakor, Anjan V. - 2002

ofthis theory of capital structure evolution is that optimal capital structure is essentiallydynamic, and depends on the firm …’s stock price, implying that firms issue equity when stockprices are high and debt when stock prices are low. The theory … testablepredictions. Moreover, the theory can rationalize the use of debt in the absence of taxes,agency costs or signaling considerations. …

Persistent link: https://www.econbiz.de/10011332820

Limiting limited liability

Dari-Mattiacci, Guiseppe - 2006

Limited liability may result in inefficient accident prevention, because a relevant portion of the expected harm is externalized on victims. This paper shows that under some restrictive conditions further limiting liability by means of a liability cap can improve caretaking.

Persistent link: https://www.econbiz.de/10011349185

Capital structure under financing and investment externalities

Cools, Kees; Zou, Liang - 1992

Persistent link: https://www.econbiz.de/10000122483

The (self-)funding of intangibles

Döttling, Robin; Ladika, Tomislav; Perotti, Enrico C. - 2016

In response to technological change, U.S. corporations have been investing more in intangible capital. This transformation is empirically associated with lower leverage and greater cash holdings, and commonly explained as a precautionary response to reduced debt capacity. We model how firms'...

Persistent link: https://www.econbiz.de/10011556238

Capital structure arbitrage revisited

Wojtowicz, Marcin - 2014

We study risk and return properties of capital structure arbitrage strategies aiming to profit from temporal mispricing between equity and credit default swaps (CDSs) of companies. We find that capital structure arbitrage provides an attractive annualized return of 24.35% on invested capital....

Persistent link: https://www.econbiz.de/10010415520