This paper develops a model that analyzes the impact of manager-stockholder conflicts and control challenge threats on leverage, firm value and debt restructuring frequency in a contingent claims framework. This is the first theoretical study to merge several lines of research - market for...

This paper introduces a dataset of securities used by US and Canadian venture capitalists (VCs) in seed, early and expansion stage Canadian entrepreneurial firms spanning the period 1991-2004. The data indicate Canadian limited partnership VCs are more likely to use common equity and convertible...

In a simple symmetric information continous time model, we consider leverage as way to finance a fraction of the investment cost. We show that underinvestment cannot arise while over-investment may and the room for overinvestment is negatively related with the fraction paid by equityholders....

This paper reviews a timely legal book on Global Venture Capital Transactions (Brechbuehl and Wooder, 2004) in the context of academic entrepreneurial finance work on venture capital contracting. Legal scholarship in Global Venture Capital Transactions is provided for 12 countries (Austria,...

The corporation's core objective is to further the interests of shareholders. But one judicially crafted exception has long existed. In many jurisdictions around the world, financial distress mandates a shift to a duty to creditors. In May 2007, the Delaware Supreme Court announced a modern law...

This paper identifies a strong tendency for Canadian private equity investors to finance entrepreneurs that reside in the same province. For all types of investors and entrepreneurial firms, in terms of the number of investments (13,729 transactions), 84.42% of investments were intra-provincial....

This study explains derivative use with multivariate analysis over a sample of 374 large Australian companies. Scale, financial distress, taxes, management compensation, agency costs, optimal investment arguments and the existence of foreign assets and foreign sales help to explain derivative...

Valuation Methods and shareholder value creation is a complete book about business valuation and value creation. The book explains the nuances of different valuation methods and provides the reader with the tools for analyzing and valuing any business, no matter how complex. With 631 pages...

Prior research has argued that convertible preferred equity is the optimal form of venture capital finance, based on datasets with up to 213 observations from the U.S., where unique tax biases exist in favour of convertible preferred. This paper introduces a comparable sample of 3083 Canadian...

At the start of 1994 Metallgesellschaft AG, the 14th largest corporation in Germany, stood on the brink of bankruptcy as a result of more than $1 billion in losses from trading in oil futures. The futures trades were ostensibly a hedge for the firm's oil delivery contracts. How could a set of...