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Asymmetric Information, Debt Capacity, and Capital Structure
Lemmon, Michael L. - 2016
A theory of capital structure in which costs associated with asymmetric information are the sole friction is used to … present a new perspective on the standard pecking order theory. In the model, both the amount of debt and the restrictiveness …
Persistent link: https://www.econbiz.de/10013007928
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Asymmetric Information, Debt Capacity, and Capital Structure
Lemmon, Michael L. - 2016
We present a tradeoff theory of capital structure in which costs associated with asymmetric information are the sole …
Persistent link: https://www.econbiz.de/10013008199
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Information transparency of firm financing
Noël, Antoine L.; Sun, Amy Hongfei - 2021
We propose a theory of optimal firm financing given nested information problems of adverse selection and agency cost …
Persistent link: https://www.econbiz.de/10012547888
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Asymmetric Information, Disagreement, and the Valuation of Debt and Equity
Banerjee, Snehal; Breon-Drish, Bradyn M.; Smith, Kevin - 2022
We study the prices of a firm's debt and equity in a market where investors have private information and may exhibit differences of opinion. We show how debt and equity valuations, and the impact of public information and distress risk on these valuations, depend upon disagreement and the...
Persistent link: https://www.econbiz.de/10014238266
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Agency Costs, Information, and the Structure of Corporate Debt Covenants
Lowery, Richard - 2012
Private debt contracts tend to have covenants that restrict future investment, restrict capital structure decisions, or impose thresholds for cash flows or other performance measures. While previous studies have demonstrated a relationship between firm characteristics and the overall strictness...
Persistent link: https://www.econbiz.de/10013109048
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Information Acquisition and Corporate Debt Illiquidity
Babenko, Ilona - 2018
Models based on asymmetric information predict that debt is least sensitive to private information and cannot explain the illiquidity of corporate debt in secondary markets. We analyze security design with moral hazard and offer a new explanation. First, the optimal compensation contract creates...
Persistent link: https://www.econbiz.de/10012937695
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The impact of firm leverage on investment decisions : the new approach of hierarchical method
Mo Tran Thi; Ha Hoang Thi Thu; Diep Nguyen Thi Thanh - In: Cogent business & management 10 (2023) 2, pp. 1-19
This paper investigates the impact of firm leverage on its investment activities. Especially, the research is conducted in the context of the Vietnamese emerging market, an incomplete market in South East Asia with the existence of inefficient market problems such as information asymmetry and...
Persistent link: https://www.econbiz.de/10014504945
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Does Competition from New Equity Mitigate Bank Rent Extraction? Insights from Japanese Data
Wu, Xueping - 2009
significantly negative (consistent with holdup theory), turns significantly positive towards the high end of the growth spectrum. We …
Persistent link: https://www.econbiz.de/10013155711
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Capital Structure Choice, Information Asymmetry and Debt Capacity : Evidence from India
Komera, Surenderrao - 2016
We examine the relevance of the pecking order theory of capital structure among emerging market firms in the light of … that sample firms follow the pecking order while making their financing choices.We find that the pecking order theory fares … theory fails to explain sample firms' financing choices …
Persistent link: https://www.econbiz.de/10012980527
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Debt and creative destruction : why could subsidizing corporate debt be optimal?
He, Zhiguo; Matvos, Gregor - In: Management science : journal of the Institute for … 62 (2016) 2, pp. 303-325
Persistent link: https://www.econbiz.de/10011446169