This paper contains a survey of the literature on dividend policy. We start with a description of the Miller-Modigliani dividend irrelevance proposition and then consider the effect of relaxing the assumptions it is based on. In particular, we consider the role of taxes, asymmetric information,...

This paper studies Reverse Asset Substitution (RAS), an agency problem in which banks place investment and borrowing restrictions on firms as part of a strategy to extract surplus from the firms over multiple periods. RAS arises for firms that cannot access public debt markets due to agency...

It is commonly believed that equity finance for banks is more costly than deposits. This suggests that banks should economize on the use of equity and regulatory constraints on capital should be binding. Empirical evidence suggests that in fact this is not the case. Banks in many countries hold...