by curbing risk-taking incentives, the higher the leverage the bank is permitted to take on. Consequently, the risk …

This paper examines the dynamic relationship between firm leverage and risktaking. We embed the traditional agency … problem of asset substitution within a multi-period model, revealing a U-shaped relationship between leverage and risktaking …, evident in data from both the U.S. and Europe. Firms with medium leverage avoid risk to preserve the option of issuing safe …

report high equity earnings. Managers rely most heavily on debt to finance their asset growth when their future earnings … perspective equity is "expensive". Managers of high debt issuing firms are more likely to be newly appointed and also more likely … to be replaced in subsequent years. Abnormal returns on portfolios formed on the basis of asset growth and debt issuance …

debt and expand corporate bond issuance, thus increasing overall debt size and extending maturity. …

debt financing when earnings prospects are poor. We term this 'leaning against the wind' and consider three possible … unrealistically optimistic earnings expectations by analysts and deteriorating real opportunities, will rely more heavily on debt …

market monitoring in designated bail-in debt. Specifically, focusing on the write-down feature as loss absorption mechanism … in CoCo debt, I do find a yield premium on this feature relative to equity-conversion CoCo bonds as predicted by … the idea of CoCo investors acting as monitors, which is a prerequisite for a meaningful role of CoCo debt in banks …

inside debt only if it is unsecured. Second, the relation between credit spreads and equity incentives varies depending on … the features of inside debt. We show that credit spreads are increasing in equity incentives. This relation becomes … stronger as the seniority of inside debt increases. Using a sample of U.S. public firms with traded credit default swap …

inside debt features affect the relation between credit spreads and compensation components. First, inside debt reduces … credit spreads only if it is unsecured. Second, inside debt exerts important indirect effects on the role of equity … incentives: When inside debt is large and unsecured, equity incentives increase credit spreads; When inside debt is small or …