Similar Search Results

The firm under uncertainty: capital structure and background risk

Broll, Udo; Wong, Keith K.P. - 2010

This paper examines the interplay between the real and financial decisions of the competitive firm under output price uncertainty. The firm faces additional sources of uncertainty that are aggregated into a background risk. We show that the firm always chooses its optimal debt-equity ratio to...

Persistent link: https://www.econbiz.de/10010301363

The strategic effect of debt in dynamic price competition with fluctuating demand

Neubecker, Leslie - 2002

This paper shows that obligations from debt hinder tacit collusion if equity owners are protected by limited liability. In contrast to its advantageous commitment value in short-run competition, leverage reduces profits from infinite interaction. Contrasting uncorrelated shocks with a cyclical...

Persistent link: https://www.econbiz.de/10010305086

Debt overhang and capital regulation

Admati, Anat R.; DeMarzo, Peter M.; Hellwig, Martin F.; … - 2012

We analyze shareholders' incentives to change the leverage of a firm that has already borrowed substantially. As a result of debt overhang, shareholders have incentives to resist reductions in leverage that make the remaining debt safer. This resistance is present even without any government...

Persistent link: https://www.econbiz.de/10010323860

Disagreement and Flexibility: A Theory of Optimal Security Issuance and Capital Structure

Boot, Arnoud W.A.; Thakor, Anjan V. - 2003

ofthis theory of capital structure evolution is that optimal capital structure is essentiallydynamic, and depends on the firm …’s stock price, implying that firms issue equity when stockprices are high and debt when stock prices are low. The theory … testablepredictions. Moreover, the theory can rationalize the use of debt in the absence of taxes,agency costs or signaling considerations. …

Persistent link: https://www.econbiz.de/10010324789

Creditor Rights and Debt Allocation within Multinationals

Akbel, Basak; Schnitzer, Monika - 2009

We analyze the optimal debt structure of multinational corporations choosing between centralized or decentralized borrowing. We identify how this choice is affected by creditor rights and bankruptcy costs, taking into account managerial incentives and coinsurance considerations. We find that...

Persistent link: https://www.econbiz.de/10010334120

Capital structure decisions under the German tax code

Nippel, Peter - 2006

We consider the tax advantage of an increase in the firms leverage under the German tax code. The analysis is performed (i) for the case of a given investment and future dividend policy and (ii) to decide on the relative tax advantage of debt versus equity for funding new investments. We start...

Persistent link: https://www.econbiz.de/10011558817

Debt as a (credible) collusive device, or: "Everybody happy but the consumer"

Spagnolo, Giancarlo - 1999

The paper proposes a theory of the anti-competitive effects of debt finance based on the interaction between capital …

Persistent link: https://www.econbiz.de/10011608557

Firms' financial choices and thin capitalization rules under corporate tax competition

Haufler, Andreas; Runkel, Marco - 2008

Thin capitalization rules have become an important element in the corporate tax systems of developed countries. This paper sets up a model where national and multinational firms choose tax-efficient financial structures and countries compete for multinational firms through statutory tax rates...

Persistent link: https://www.econbiz.de/10010264461

Corporate debt, hybrid securities and the effective tax rate

Panteghini, Paolo M. - 2008

In this article we use contingent-claim analysis to calculate the effective tax rate (ETR) under corporate debt finance. In particular, we deal with both pure debt and two of the most well-known hybrid securities, i.e., convertible, and reverse convertible bonds. We show that: 1) effective...

Persistent link: https://www.econbiz.de/10010276143

Taxes and the efficiency costs of capital distortions

Weichenrieder, Alfons J.; Klautke, Tina - 2008

departure from tax neutrality. Against this background, the present paper discusses the theory of capital structure and provides …

Persistent link: https://www.econbiz.de/10010277187

1
2
3
4
5
6
7
8
9
10
Next
Last