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Credit rating as a mechanism for capital structure optimization: Empirical evidence from panel data analysis
Sajjad, Faiza; Zakaria, Muhammad - In: International Journal of Financial Studies 6 (2018) 1, pp. 1-14
relationship between credit rating scales and leverage ratio is a non-linear inverted U shape. High- and low-rated companies have a … low level of leverage, whereas mid-rated companies have a high level of leverage. It is evident that costs and benefits of …
Persistent link: https://www.econbiz.de/10011996078
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An inverse problem study : credit risk ratings as a determinant of corporate governance and capital structure in emerging markets : evidence from Chinese listed companies
Kang, ManYing; Ausloos, Marcel - In: Economies : open access journal 5 (2017) 4, pp. 1-23
governance can be thought to be an interesting finding. The relationship we find between credit rating and leverage is not as … director, firm size, tangible assets and firm age, and CEO and chairman office plurality. However, leverage is found to be … associated with leverage, but in a less significant way. CEO-Board chairship duality is insignificantly related to leverage. The …
Persistent link: https://www.econbiz.de/10011778650
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Is rated debt arm's length? : evidence from mergers and acquisitions
Gropp, Reint; Hirsch, Christian; Krahnen, Jan Pieter - 2011
constant, rated firms increase their leverage in takeover transactions by less than their unrated counterparts. Consistent with …
Persistent link: https://www.econbiz.de/10008934787
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The Relevance of External Credit Ratings in the Capital Structure Decision-Making Process
Michelsen, Marc - 2012
This paper empirically examines the relevance of external credit ratings in the capital structure decision-making process with regard to an international firm sample. Using the rating outlook to measure the imminence of a rating change, allows us to test managers' ex-ante capital structure...
Persistent link: https://www.econbiz.de/10013113516
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Have Rating Agencies Become More Conservative? Implications for Capital Structure and Debt Pricing
Baghai, Ramin - 2013
leverage, and hold more cash; they are also less likely to obtain a debt rating and they experience lower sales growth. However …
Persistent link: https://www.econbiz.de/10013092829
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Employee Well-Being, Firm Leverage, and Bankruptcy Risk
Verwijmeren, Patrick - 2009
optimal amount of leverage. We find that firms with leading track records in employee well-being significantly reduce the … have better credit ratings, even when we control for differences in firm leverage …
Persistent link: https://www.econbiz.de/10013155261
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Priority Spreading of Corporate Debt
Badoer, Dominique C. - 2019
Priority spreading refers to the practice of firms increasing their reliance on secured and subordinated debt and reducing their reliance on senior debt as their credit quality deteriorates. We argue that priority spreading occurs, in part, because security provides creditors with greater...
Persistent link: https://www.econbiz.de/10012902510
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Employee Costs of Corporate Bankruptcy
Graham, John R. - 2019
An employee's annual earnings fall by 10% the year her firm files for bankruptcy and fall by a present value of 67% over seven years. This effect is more pronounced in thin labor markets and among small firms that are ultimately liquidated. Compensating wage differentials for this “bankruptcy...
Persistent link: https://www.econbiz.de/10012905324
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Leverage Dynamics and Credit Quality
Ordoñez, Guillermo - 2019
We study a dynamic model of collateralized credit markets with asymmetric information, which allows for a rich set of signaling strategies based on the path of debt and repayment. Whether credit history reveals private information about credit quality depends on the degree of uncertainty in...
Persistent link: https://www.econbiz.de/10012905381
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Financial distress, refinancing, and debt structure
Dudley, Evan - 2018
We examine changes in debt structure when firms experience financial distress. At these points in time, firms refinance and undergo substantial changes in priority structure. Specifically, we find that firms di- versify their priority structure relative to its pre-distress composition. We show,...
Persistent link: https://www.econbiz.de/10012936867