This paper develops a model of financing that jointly determines a firm's capital structure, its voluntary disclosure policy, and its cost of capital. Investors who receive securities in return for supplying capital sometimes incur losses when they trade their securities with an informed trader....

In this paper, managers differ from each other in terms of the probability that they are "forthcoming" (and disclose all the earnings forecasts they receive) or "strategic" (and disclose the earnings forecasts they receive only when it is in their self-interest to do so). Strategic managers...

We propose a redesign of sovereign Credit Default Swaps (CDS). Under our proposal, a notional CDS position of €100 can be settled by the delivery of whatever package of instruments a sovereign gives in exchange for legacy bonds with a face value of €100. To illustrate, suppose a European...

This paper studies the joint effect of conservatism and aggregation on the cost of equity capital and the e fficiency of debt contracts. In the model, a firm's two assets are valued at either the lower-of-cost-or-market or fair value and the accounting report aggregates the value of the two...