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Capital Structure Under Heterogeneous Beliefs

Jung, Hae Won (Henny) - 2013

We develop a structural model to quantitatively analyze the effects of asymmetric beliefs and agency conflicts on capital structure. Capital structure reflects the dynamic tradeoff between the positive incentive effects of managerial optimism and the negative effects of risk-sharing costs....

Persistent link: https://www.econbiz.de/10013077082

Network Effects in Corporate Financial Policies

Grieser, William - 2020

We study the role of peer effects in capital structure decisions by exploiting the heterogeneous and intransitive nature of product market networks combined with spatial econometric techniques that account for these features. In contrast to prior work, this approach allows us to provide...

Persistent link: https://www.econbiz.de/10012827439

De and re-levering betas with risky debt

Krause, Marko Volker - In: Business research 12 (2019) 2, pp. 703-720

De- and re-levering betas is important to obtain discount rates for assets that are not publicly traded. A de- and re-levering procedure is around for the case of risk-free debt. The procedure for risky debt is much less clear even under very simplifying assumptions. In this paper, I concretize...

Persistent link: https://www.econbiz.de/10012256377

Fundamental risk and capital structure

Hajda, Jakub - 2017

are more persistent to preserve debt capacity needed to fund investment. The model also provides rationale why the …

Persistent link: https://www.econbiz.de/10011874719

Optimal financing for R􀓕D-intensive firms

Thakor, Richard T.; Lo, Andrew W. - 2017 - This draft: September, 2017

We develop a theory of optimal financing for R&D-intensive firms. With only market financing, the firm relies …

Persistent link: https://www.econbiz.de/10011749390

The impact of firm leverage on investment decisions : the new approach of hierarchical method

Mo Tran Thi; Ha Hoang Thi Thu; Diep Nguyen Thi Thanh - In: Cogent business & management 10 (2023) 2, pp. 1-19

This paper investigates the impact of firm leverage on its investment activities. Especially, the research is conducted … between corporate leverage and investment. Regarding methodology, we build the two main types of econometric models … hierarchy on firm investment that the traditional regression model may fail to achieve. We construct three-level predictors …

Persistent link: https://www.econbiz.de/10014504945

Leverage and risk-taking in a dynamic model

Berg, Tobias; Heider, Florian - 2024

This paper examines the dynamic relationship between firm leverage and risktaking. We embed the traditional agency problem of asset substitution within a multi-period model, revealing a U-shaped relationship between leverage and risktaking, evident in data from both the U.S. and Europe. Firms...

Persistent link: https://www.econbiz.de/10014584403

Risk Class Completion of the Modigliani and Miller Model – A New Framework for Discounted Cash Flow

Casey, Christopher - 2016

discounting procedure leading to the growth formula is non-trivial. Since innumerable investment policies are conceivable besides … original Modigliani and Miller model. By doing so, the model becomes a challenger of current DCF theory …

Persistent link: https://www.econbiz.de/10012995722

Optimal Capital Structure, Subsidy and the Unexpected Debt-Equity Swap Policy

Yang, Ei - 2018

ratio of non-financial firms after 2008. We study the effects of this policy on the firms' investment decisions and the … generates a severe debt-overhang problem. We show that the swap can reduce leverage, promote investment and lower the agency …

Persistent link: https://www.econbiz.de/10012916197

Modeling Managers As EPS Maximizers

Ben-David, Itzhak; Chinco, Alexander M. - National Bureau of Economic Research - 2023

Textbook theory assumes that firm managers maximize the net present value of future cash flows. But when you ask them …

Persistent link: https://www.econbiz.de/10014250143