Beladi, Hamid; Quijano, Margot - In: International Review of Financial Analysis 30 (2013) C, pp. 182-188
Using a sample from 1993 to 2010 of U.S. corporate bank loans, we study the relationship between CEO incentives for risk-shifting, proxied by Vega, and the cost of corporate bank loans. Equity-based compensation can enhance risk-shifting incentives, encouraging managers to make risky choices to...