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Dynamic Debt Maturity
He, Zhiguo - 2016
A firm chooses its debt maturity structure and default timing dynamically, both without commitment. Via the fraction of … newly issued short-term bonds, equity holders control the maturity structure, which affects their endogenous default …
Persistent link: https://www.econbiz.de/10013000527
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Leverage Dynamics Without Commitment
DeMarzo, Peter M. - 2016
voluntarily reduce debt. On the other hand, countervailing effects of asset growth and debt maturity cause leverage to mean … ultimately mean-reverts. The target level of leverage, and the speed of adjustment depends critically on debt maturity …; nonetheless, in equilibrium shareholders are indifferent toward the debt maturity structure …
Persistent link: https://www.econbiz.de/10012979368
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Debt and Equity Yields : 1926-80
Hendershott, Patric H. - 2010
The study is divided into four broad parts, beginning with an exploratory analysis of the data on expost returns on corporate equities and bonds for the 1926-80 period. In Part 2, we estimate the relationships between one-month expost returns on corporate bonds and equities andvariations in...
Persistent link: https://www.econbiz.de/10012763036
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Optimal Debt and Profitability in the Tradeoff Theory
Abel, Andrew B. - 2015
theory of debt holds: optimal debt equates the marginal tax shield and the marginal expected cost of default. Contrary to … optimal leverage ratio when the tradeoff theory holds …
Persistent link: https://www.econbiz.de/10013015555
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Dynamic Debt Runs
He, Zhiguo - 2009
the roles played by volatility, illiquidity and debt maturity in driving debt runs, as well as on firms' capital adequacy …
Persistent link: https://www.econbiz.de/10013155020
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Systematic Risk, Debt Maturity, and the Term Structure of Credit Spreads
Chen, Hui - 2012
-varying debt maturity choices, as well as its implications for the term structure of credit spreads. Compared to short-term debt … liquidity costs changing over the business cycle, our calibrated model implies that debt maturity is pro-cyclical, firms with … high systematic risk favor longer debt maturity, and that these firms will have more stable maturity structures over the …
Persistent link: https://www.econbiz.de/10013100984
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Internal Versus External Capital Markets
Gertner, Robert H. - 2010
This paper presents a framework for analyzing the costs and benefits of internal vs. external capital allocation. We focus primarily on comparing an internal capital market to bank lending. While both represent centralized forms of financing, in the former case the financing is owner-provided,...
Persistent link: https://www.econbiz.de/10013139878
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The Optimal Concentration of Creditors
Bris, Arturo - 2010
There are situations in which dispersed creditors (e.g., public creditors) have more difficulties and higher costs when collecting their claims in financial distress than concentrated creditors (e.g., banks). Under this assumption, our model predicts that measures of debt concentration relate...
Persistent link: https://www.econbiz.de/10012763082
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Banks as Secret Keepers
Dang, Tri Vi - 2014
Banks are optimally opaque institutions. They produce debt for use as a transaction medium (bank money), which requires that information about the backing assets - loans - not be revealed, so that bank money does not fluctuate in value, reducing the efficiency of trade. This need for opacity...
Persistent link: https://www.econbiz.de/10013051755
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Financial Frictions and Firm Dynamics
Bergin, Paul R. - 2014
Firm entry dynamics are an integral part of the propagation of financial shocks to the real economy. A VAR documents that adverse financial shocks in the U.S. postwar period are associated with a fall in new firm creation and a fall in firm equity values. We propose a DSGE model with endogenous...
Persistent link: https://www.econbiz.de/10013054047