Tchistyi, Alexei; Yermack, David; Yun, Hayong - In: Journal of Financial and Quantitative Analysis 46 (2011) 03, pp. 657-686
We examine the relation between chief executive officers’ equity incentives and their use of performance-sensitive debt contracts. These contracts require higher or lower interest payments when the borrower’s performance deteriorates or improves, thereby increasing expected costs of...