Download or read book Essays on Corporate Capital Structure Decisions written by Timo Löyttyniemi and published by . This book was released on 1991 with total page 156 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Corporate Capital Structure Equilibrium written by Choongseok Kang and published by . This book was released on 1991 with total page 332 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on the Effects of Uncertainty on Corporate Capital Structure written by Oleksandr Talavera and published by . This book was released on 2005 with total page 100 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Institutional Investment and Corporate Capital Structure written by Tian Tang and published by . This book was released on 2008 with total page 288 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Voting Power Corporate Governance and Capital Structure written by Yinghong Chen and published by . This book was released on 2004 with total page 204 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Corporate Capital Structure written by Boris Albul and published by . This book was released on 2012 with total page 274 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies capital structure decisions of levered and unlevered firms using the modeling framework of Leland (1994). The first chapter, Cash Holdings and Financial Constraints, focuses on optimal management of cash holdings by equity holders of a levered, financially constrained firm. I add financial constraints as a market friction to the traditional model. A financially constrained firm is not able to issue new equity to subsidize net operating losses and is subject to premature, costly default on its straight debt. The more constrained the firm is the less equity it is able to issue and the more likely it is to default. Equity holders mitigate the effects of financial constraints by managing a costly cash account, based on retained net operating profits. In the theoretical section, I show that firms that are more financially constrained optimally hold more cash but remain more likely to default compared to their less constrained counterparts. Hence, firms with higher cash holdings are riskier, and claims on their assets should trade at a premium. In the empirical section, I find evidence of this observation in straight debt and common equity markets. Firms with higher cash holdings are observed with higher yields on debt and higher returns on equity, In the second chapter, Contingent Capital Bonds (CCBs) and Capital Structure Decisions, a joint work with Dwight Jaffee and Alexei Tchistyi, we provide a formal model of CCBs, a new instrument offering potential value as a component of corporate capital structures for all types of firms, as well as being considered for the reform of prudential bank regulation following the financial crisis of 2007-2008. CCBs are debt instruments that automatically convert to equity if and when the issuing firm reaches a specified level of financial distress. We develop closed form solutions for CCB value under three assumptions. First, the firm is allowed a tax deduction on its CCB interest payments as long as the security remains outstanding as a bond. Second, we assume that adding CCBs to a firm's capital structure has no impact on the level of the firm's asset holdings. Third, we require that the CCB conversion to equity occurs at a time prior to any possible default by the firm on its straight debt. The key contribution of our work is that we provide a formal financial model in which the effects of alternative CCB contract provisions can be analytically evaluated. We show that a firm will always gain from including CCB in its capital structure as a result of the tax shield benefit. A firm creating a de novo capital structure, assuming it faces the regulatory constraint that the CCB can only replace a part of what would have been the optimal amount of straight debt, will always issue at least a small amount of CCB. The reduction in expected bankruptcy costs ensures a net gain, even if the tax shield benefits are reduced. We show that a firm will never add CCB to an existing capital structure, assuming that it faces the regulatory constraint that the CCB can only be introduced as part of a swap for a part of the outstanding straight debt. While the swap may increase the firm's value - the value of reduced bankruptcy costs may exceed any loss of tax shield benefits - the gain accrues only to the holders of the existing straight debt. As in a classic debt overhang problem, equity holders will not act to enhance the overall firm value. We show that for a Too-Big-To-Fail firm, for which the straight debt is risk free because the bond holders correctly assume they will protected from any potential insolvency, under a regulatory limitation on the amount of debt such a firm may issue, a CCB for straight debt swap reduces the value of the government subsidy by reducing the expected cost of bondholder bailouts. While this has a taxpayer benefit, the equity holders of such a firm would not voluntarily participate in such a swap. We demonstrate that CCBs create an incentive for market manipulation. CCB holders may have an incentive to manipulate the stock price to a lower value if the amount of equity they receive at conversion is sufficiently high. Equity holders may have an incentive to manipulate the stock price down if the amount of equity they give up at conversion is sufficiently low. We summarize, that the regulatory benefits of CCB issuance with respect to bank safety will generally depend on the CCB contract and issuance terms. Perhaps most importantly, the regulatory benefits vanish if banks simply substitute CCBs for capital, leaving the amount of straight debt unchanged. It is thus essential to require CCB issuance to substitute for straight debt (and not for equity).

Download or read book Essays on Corporate Risk and Capital Structure written by Babak Lotfaliei and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: "This dissertation consists of two essays and five chapters. The first essay in chapter two addresses the zero-leverage puzzle, the observation that many firms do not issue debt and thus seem to forego sizable debt benefits. Based on the trade-off theory, a firm financed with debt saves on taxes, while it faces the debt costs associated with financial distress. Firms issue debt and net a positive gain by trading off costs and benefits. However, zero-levered firms seemingly ignore significant tax advantages associated with debt financing. I propose that this behavior is due to the value in waiting to issue debt and postponing debt costs. By considering the real option of issuing debt, small and risky firms have incentives to postpone debt issuance, even when standard trade-off theory predicts that these firms should have leverage. Thus, the value of debt-free firms should include an option component whose value is derived from future debt issuance benefits. I present a simple model for a firm's optimal issuance with optimal leverage and default, and find the factors that increase the propensity to remain zero-levered: high volatility, high debt costs, low tax levels, low payout rate, and small size. I verify the factors empirically on a sample of zero-leverage (ZL) firms by estimating a survival and a choice model and an out-of-sample test on levered firms.The second essay in chapter three provides an explanation for the underleverage puzzle by relating it to volatility risk premia. As a stylized fact, many firms have lower leverage compared to what the trade-off theory predicts, in particular based on their low asset volatility. In addition, the underleverage is the highest for Investment-Grade (IG) firms. Without volatility risk, the essay empirically documents that underleverage across firms increases with volatility risk premium at the asset level. The result is the motive to present two models with stochastic asset volatility that feature optimal capital structure. With priced asset volatility risk, the models in standard trade-off settings show that a higher premium implies lower leverage; the assets' Variance Risk Premia (VRP) reduce tax benefits and increase debt costs. Empirically, the models' calibration leaves no significant underleverage patterns in the cross-section of the firms. Thus, seemingly underleveraged firms have high asset volatility risk premia relative to their low physical asset volatility, which explains their apparent underleverage. In particular, the largest proportion of the volatility is systematic for IG firms; and, consequently, VRP are the highest. This in turn leads to a lower implied leverage, close to the IG firms' empirical leverage.Chapter four reviews the literature related to the earlier chapters. Chapter five concludes with the main findings and provides venues for the future research." --

Download or read book Essays on Capital Structure and Trade Financing written by Klaus Hammes and published by Department of Economics School of Economics and Commercial Law Go. This book was released on 2003 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Corporate Capital Structure and Cash Holdings written by Cuong Manh Nguyen and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this thesis, I examine several important aspects of firms' financing processes in the G-5 countries consisting of France, Germany, Japan, the UK, and the US.First, I investigate the asymmetry in firms' partial adjustments toward their target leverage, conditional on deviations from target leverage and financing gaps. Using the system Generalized Method of Moments, I show that the asymmetry in firms' leverage adjustments are driven by differences in these factors. Firms adjust toward their target leverage faster when being over-levered and/or facing a financing deficit, a behavior in strong support of the dynamic trade-off theory of corporate leverage. Second, I examine whether firms' choices of securities enable them to close out deviations from target leverage through asymmetric, logistic models that take into account both total costs of leverage adjustments (as proposed by the trade-off theory) and costs of adverse selection (as proposed by the pecking-order theory). The results suggest that even when firms' choices of securities reflect their target adjustments as they allow them to move closer toward their target leverage, costs of adverse selection may still have some influence on these choices. Finally, I develop asymmetric, partial adjustment models to examine firms' cash holdings adjustments. Consistent with the optimal cash holdings view, I find that firms have optimal levels of cash holdings and attempt to adjust toward these over time. Further, there is asymmetry in both their speeds and mechanisms of adjustments. Firms with above-target cash holdings adjust toward their targets faster than those with below-target cash holdings as their mechanisms of adjustments may involve relatively lower costs. They adjust mainly via changes in cash flows from financing and cash flows from investing while their counterparts adjust mainly via changes in cash flows from operating. I also document some evidence on the asymmetric impact of the magnitude of deviations from target cash holdings and factors which proxy for the levels of financial constraints on firms' cash holdings adjustments and find that the impact of these proxies tends to be weaker than that of deviations from target cash holdings.

Download or read book Three Essays on the Effect of Regulations on Corporate Capital Structure Investment Performance written by Zoya Saher and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Corporate Control and Capital Structure written by Erik Berglöf and published by . This book was released on 1991 with total page 228 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Corporate Risk Management and Capital Structure written by Marian Turac and published by . This book was released on 2000 with total page 182 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Corporate Debt Capital Structure and Managerial Entrenchment written by Hao Wang and published by . This book was released on 2007 with total page 276 pages. Available in PDF, EPUB and Kindle. Book excerpt: "In the third essay, we develop a valuation model that simultaneously captures credit risk and interest rate risk, and apply it to study the valuation of putable corporate bonds. We ask what risks put features provide insurance against in practice - credit risk, liquidity risk or interest rate risk - and to what degree? We find that they reduce the components of all three risks in bond spreads. The most important, perhaps surprisingly is default or spread risk, followed by term structure risk. The reduction in the liquidity component is present but rather small." --

Download or read book Essays on Capital Structure Decisions written by Philipp Immenkötter and published by . This book was released on 2014 with total page 146 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Corporate Financial Management in Shipping written by Arman Gûlnur and published by . This book was released on 2022 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Capital Structure written by Andrew Hardy Roper and published by . This book was released on 2002 with total page 105 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Empirical Corporate Finance written by Brandon Julio and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The second essay follows up on the first by investigating whether debt repurchase activity is consistent with the existence of an optimal capital structure. I find that the timing and size of debt repurchases are consistent with trade-off theories of capital structure. Specifically, the likelihood and size of debt repurchases is increasing in a firm's deviation from its estimated target. The positive abnormal returns around the announcement of repurchases are increasing in the deviation from the target debt level, consistent with an optimal capital structure.