A firm's current leverage ratio is one of the core characteristics of credit quality used in statistical default prediction models. Based on the capital structure literature, which shows that leverage is mean-reverting to a target leverage, we forecast future leverage ratios and include them in...

When partially inalienable managerial entrenchment is introduced to Zwiebel's 1996 model of dynamic capital structure, anticipated debt renegotiation between a higher-type manager and the creditor reduces expected firm value. Only lower-type managers can issue debt to avoid shareholder takeover

We test the determinants of leverage within the trade-off and pecking order framework, and the speed of adjustment to the target leverage of large and small firms quoted on a regulated (Main) and relatively unregulated market (AIM) in the UK. We find that both firm size and market of quotation...

I propose a neoclassical production economy with costly external financing, partial investment irreversibility, and endogenous investment/financing decisions to rationalize and quantify the well-documented interaction between the book-to-market equity effect and the financial leverage effect in...

The net profit of any business entity for a particular time period can be conceptualized as the final outcome of its investing, financing and operating activities. These activities are influenced by Management's decisions and several internal and external environmental factors. This paper...

We study a defaultable firm's debt priority structure in a simple structural model where the firm issues senior and junior bonds and is subject to both liquidity and solvency risks. Assuming that the absolute priority rule prevails and that liquidation is immediate upon default, we determine the...

This article studies how the managers of a regulated firm can use debt and equity contracts to constrain the regulator's policy through the contingent transfer of control to external investors with high relative liquidation value. External finance increases regulated income and facilitates...

The book proposes an original contribution to the economics and finance literature by developing the foundations of corporate finance. It also covers in detail various corporate governance issues faced by organizations. The common treatment of corporate finance and corporate governance started...

Modern institutes of the market form new factors of the global economy. Stock exchanges, other institutes of the investment market, financial Internet communications create the integrated pace of world economic system. The companies test direct influence from global information-financial space....