This article aims to analyze the evolution of private equity over the last decade in terms of valuation (asset prices), determinants of private equity returns and the role that leverage and corporate governance plays in the success of private equity. The years 2005-2007 were characterized by a...

This article aims to analyse the evolution over the recent years of LBO funds, in terms of valuation (asset prices) and the role that leverage and corporate governance played in its evolution.Leverage is one of the positive factors that is supposed to contribute to the success of private equity,...

We study the capital structure reactions of firms that have been added to Standard & Poor's CreditWatch list in order to test the role of credit ratings in firm financial decisions. Survey evidence by Graham and Harvey (2001) indicates that CFOs consider credit ratings as the second most...

In this paper we address the magnitude of debt-related tax shields employing a proprietary data set of 56 German leveraged buyouts (LBOs) completed between 1997 and 2011. In particular we examine the relevance and performance contribution of tax shields under different financing policies, and...

This study proposes a novel method based on within-zone leverage variations to measure the magnitude of stable leverage episodes at the firm level. Using this method, we investigate a leading candidate determinant of such episodes' length: access to credit. Using a discontinuity approach with...

This paper revisits recent investigations into the role credit ratings play in the marginal financing behavior of firms. While it has long been documented that credit ratings may be an important determinant of firm capital structure policy, academics have only recently subjected this motivation...

Sell-side analysts play an important role in propagating corporate capital structure choices across firms. Using exogenous characteristics of analyst network peers as well as the “friends-of-friends” approach from the network effects literature to identify peer effects, we find that...

We survey 79 private equity (PE) investors with combined assets under management of more than $750 billion about their practices in firm valuation, capital structure, governance, and value creation. Investors rely primarily on internal rates of return and multiples to evaluate investments. Their...

This study examines the influence of a firm's geographical location on corporate debt and provides evidence that the higher cost of collecting information on firms distant from urban areas has significant implications on a wide array of corporate debt characteristics. We find that rural firms...

Early-stage firms utilize venture debt in one-third of financing rounds despite their general lack of cash flow and collateral. In our model, we show how venture debt aligns incentives within a firm. We derive a novel theoretical channel in which runway extension through debt increases firm...