This paper, instead of focusing on agency cost, analyzes the role of risk-sharing under problems of enforceability (default) to explain the optimal determination of capital structure. Optimal contract structure presents equity and debt.

Background: Previous studies have shown that in some countries, liquid assets increased leverage while in other countries liquid firms were more frequently financed by their own capital and therefore were less leveraged. Objectives: The aim of this paper is to investigate the impact of liquidity...

This paper explores the determinants of the capital structure of Serbian firms listed on the regulated market using panel data. We model the leverage ratio as a function of firm-specific characteristics. The findings indicate the emerging character of Serbian corporate environment. We document...

This paper solves for a firm's optimal cash holding policy within a continuous time, contingent claims framework that has been extended to incorporate most of the significant contracting frictions that have been identified in the corporate finance literature. Under the optimal policy the firm...

The paper reviews the evolution in insurance economics over the past 25 years, by first recalling the situation in 1973, then presenting the developments and new approaches which flourished since then. The paper argues that these developments were only possible because steady advances were made...

This article examines, under the Dual Theory of Choice (Yaari (1987)), the classical results and their extensions on self-insurance, self-protection and market insurance obtained by Ehrlich and Becker (1972) under the expected utility hypothesis. In particular, background risk, non-reliability,...

Severe natural catastrophes in the early nineties have brought about a lack of financial capacity in the catastrophe line of the global reinsurance market. The finance industry reacted to this situation by issuing innovative products designed to spread the excess risk more widely among...

The future course of old-age mortality is of great importance to public sector expenditures in countries where old-age programs, such as Social Security and Medicare in the US, account for large fractions of the public budget. This paper argues that the competitive market prices of motality...

This paper uses direct evidence on the self-perceived and actual mortality risk of individuals, as well as the price and quantity of their life insurance, to evaluate whether asymmetric information is a barrier to trade in insurace markets.

This paper analyzes the savings and health care impacts of mortality contingent claims, defined here as income measures, such as annuities and life-insurance, under which earned income is contingent on the length of one's life. The postwar increase in mandatory annuity and life-insurance...