منابع مشابه
Debt, Equity and Warrants
This paper considers project financing under adverse selection and moral hazard and makes three contributions. First, the issue of combinations of debt and equity is explained as the outcome of the interaction between adverse selection and moral hazard. Second, it shows that, in the presence of moral hazard, adverse selection may result in the conversion of negative into positive NPV projects l...
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The model presented in this paper is a particular case of the principal-agent problem. An entrepreneur has an investment project whose returns depend on his effort, which is not observable by the financier. After determining the optimal contract that is used to finance such a project, I show that this contract can be replicated by a unique combination of debt and equity, which proves the op tim...
متن کاملAverage Debt and Equity Returns: Puzzling?
Mehra and Prescott (1985) found the difference between average equity and debt returns puzzling because it was too large to be a premium for bearing nondiversifiable aggregate risk. Here, we re-examine this puzzle, taking into account some factors ignored by Mehra and Prescott–taxes, regulatory constraints, and diversification costs–and focusing on long-term rather than short-term savings instr...
متن کاملequity in settlement of foreign investment disputes
equity in settlement of foreign investment disputes regard of equity in judicial and non-judicial settlement of disputes is necessary. because of the international area of justice in the foreign investment disputes, the equity is more important in these cases. study of international review shows the following and predication of the equity in the adjudges. so that the equity is the basic princip...
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ژورنال
عنوان ژورنال: Theoretical Economics
سال: 2019
ISSN: 1933-6837
DOI: 10.3982/te2574