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Hackbarth, Dirk - 2018

This paper studies incentives in a dynamic contracting framework of a levered firm. In particular, the manager selects long-term and short-term efforts, while shareholders choose initially optimal leverage and ex-post optimal default policies. Notably, a resource constraint that binds the...

Persistent link: https://www.econbiz.de/10012932339

Derivatives Hedging, Capital and Leverage

Prampolini, Andrea - 2018

In this work Massimo Morini and Andrea Prampolini argue that KVA is a component of profit turned into a valuation adjustment as a by-product of regulatory constraints based on a conservative consideration of market hedges. The regulatory foundations of KVA are analyzed from RWAs to the Leverage...

Persistent link: https://www.econbiz.de/10012936693

A General Method for Valuing Complex Capital Structures

Borochin, Paul - 2019

We develop a numerical method based on the Cox et al. (1979) binomial tree option valuation approach that can accommodate arbitrarily complex capital structures with varying debt maturities and seniorities, as well as preferred stock and warrants. The method provides straightforward valuation...

Persistent link: https://www.econbiz.de/10012889238

Credit Default Swaps, the Leverage Effect, and Cross-Sectional Predictability of Equity and Firm Asset Volatility

Forte, Santiago - 2020

We investigate the informational content of credit default swap (CDS) spreads for future volatility of (firm) assets and equity. In the cross-section, CDS spreads are significantly more informative about future asset than equity volatility. The informational content of historical and option...

Persistent link: https://www.econbiz.de/10012848868

Leveraged Investments and Agency Conflicts When Cash Flows are Mean Reverting

Glover, Kristoffer J. - 2016

We analyse the effect of mean-reverting cash flows on the costs of shareholder-bondholder conflicts arising from partially debt-financed investments. In a partial equilibrium setting we find that such agency costs are significantly lower under mean-reverting (MR) dynamics, when compared to the...

Persistent link: https://www.econbiz.de/10013007967

Contingent Claims Valuation when Capital Structure Includes Options Liability

Episcopos, Athanasios - 2023

The paper shows how the traditional credit model based on contingent claims analysis can be adjusted when the capital structure includes a short position in a call or put option. The stochastic features of the asset underlying the option introduce additional risk elements into the analysis of...

Persistent link: https://www.econbiz.de/10014350667

Capital structure decision : an imlicit contract or a governance relation?

Ramamohan Rao, T. V. S. - In: Rivista internazionale di scienze economiche e … 42 (1995) 3, pp. 145-162

Persistent link: https://www.econbiz.de/10001185188

Impact of Financial Structure on Firm’s Performance : A Study of Pakistan’s Chemical Sector

Amjed, Sohail - 2011

impact of debt financing on the profitability of the firms in Chemical Sector of Pakistan. The rationale behind the industry … developing countries like Pakistan. Financial Environment has great impact on financing decisions, the role of financial … institutions is critical for capital restructuring decisions. In developing countries like Pakistan Financial Markets are …

Persistent link: https://www.econbiz.de/10014043223

An Assessment of Impact of Financial Performance and Leverage on Dividend Policy of Pakistan Chemical and Pharmaceutical Industries

Khan, Wajid - 2013

Dividend declaration represents the profitability of firms. Dividend declaration decision was made by the board of directors at annul general meeting to ensure the live long existence of a firm. The current study was carried to examined the impact of leverage and profitability on dividend payout...

Persistent link: https://www.econbiz.de/10013090827

The determinants of capital structure of the chemical industry in Pakistan

Rafiq, Muhammad; Iqbal, Asif; Atiq, Muhammad - In: The Lahore journal of economics 13 (2008) 1, pp. 139-158

Persistent link: https://www.econbiz.de/10003751656