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Granularity of corporate debt
Choi, Jaewon; Hackbarth, Dirk; Zechner, Josef - Center for Financial Studies - 2013
We study to what extent firms spread out their debt maturity dates across time, which we call granularity of corporate debt. We consider the role of debt granularity using a simple model in which a firm's inability to roll over expiring debt causes inefficiencies, such as costly asset sales or...
Persistent link: https://www.econbiz.de/10010958706
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BANKRUPTCY CODES, LIQUIDATION TIMING, AND DEBT VALUATION
Bruche, Max - Centro de Estudios Monetarios y Financieros (CEMFI) - 2009
This paper derives closed-form solutions for values of debt and equity in a continuoustime structural model in which the demands of creditors to be repaid cause a firm to be put into bankruptcy. This allows discussing the effect of creditor coordination in recovering money on the values of debt,...
Persistent link: https://www.econbiz.de/10008518021
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Banks’ optimal implementation strategies for a risk sensitive regulatory capital rule: a real options and signalling approach
Nordal, Kjell Bjørn - Norges Bank - 2006
I evaluate a bank's incentives to implement a risk sensitive regulatory capital rule and to invest in improved risk measurement. The decision making is analyzed within a real options framework where optimal policies are derived in terms of threshold levels of risk. I also evaluate the situation...
Persistent link: https://www.econbiz.de/10005063072
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Financing and Takeovers
Morellec, Erwan; Zhdanov, Alexei - 2006
This paper analyzes the interaction between financial leverage and takeover activity. We develop a dynamic model of takeovers in which the financing strategies of bidding firms and the timing and terms of takeovers are jointly determined. In the paper, capital structure plays the role of a...
Persistent link: https://www.econbiz.de/10005534190
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The impact of convertible debt financing on investment timing
Yagi, Kyoko; Takashima, Ryuta - In: Economic Modelling 29 (2012) 6, pp. 2407-2416
We develop a model to examine the timing of investment decisions in relation to the issuance of convertible debt by firms. Our model shows that when the demand shock has higher volatility, the firm finances the investment cost with high-coupon convertible debt. We find that default occurs...
Persistent link: https://www.econbiz.de/10010588230
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Real options and earnings-based bonus compensation
Huang, Hsing-Hua; Huang, Hongming; Shih, Pai-Ta - In: Journal of Banking & Finance 36 (2012) 8, pp. 2389-2402
This study extends the works of Mauer and Sarkar (2005) and Andrikopoulos (2009) by incorporating a regime-dependent earnings-based bonus into managerial compensation. Examining the individual effects of ownership shares and earnings-based bonus compensation, we find that the former provides...
Persistent link: https://www.econbiz.de/10010599643
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Capital Structure and Financial Flexibility: Expectations of Future Shocks
Lambrinoudakis, Costas; Neumann, Michael; Skiadopoulos, … - School of Economics and Finance, Queen Mary - 2014
We test one of the main predictions of the financial flexibility paradigm that expectations about future firm-specific shocks affect the firm's leverage. We extract the expectations of small and large future shocks from the market prices of equity options. We find that expectations for future...
Persistent link: https://www.econbiz.de/10011099065
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Is Leverage Effective in Increasing Performance Under Managerial Moral Hazard?
Calcagno, R. - Tilburg University, Center for Economic Research - 2000
We consider a model in which the principal-agent relation between inside shareholders and the management affects the firm value.We study the effect of financing the project with risky debt in changing the incentive for a risk-neutral shareholder (the principal) to implement the project-value...
Persistent link: https://www.econbiz.de/10011091167
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Leasing by small enterprises
Neuberger, Doris; Räthke-Döppner, Solvig - Institut für Volkswirtschaftlehre, Universität Rostock - 2012
Using internal data of a leasing company in Germany, we examine the determinants of the probability and use of leasing … by small firms. We find that small and young firms are likely to be constrained on the leasing market but use leasing to …-economic characteristics of the entrepreneur matter. Older and higher qualified entrepreneurs have easier access to leasing than those who are …
Persistent link: https://www.econbiz.de/10010986127
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LEASING, CAPITAL STRUCTURE AND DEBT DISPLACEMENT
GEORGESCU, MARIA ANDRADA - In: JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA (2005)
capital structure – presented by Myers (1984) will assist in our discussion of how leasing analysis “involves a general theory …Brealy and Young (1980, p. 1249) remind us: “…the use of any lease valuation model involves a general theory of capital …
Persistent link: https://www.econbiz.de/10010925382