Dynamic Investment, Debt Structure and Debt Overhang
نویسندگان
چکیده
منابع مشابه
Dynamic Investment, Capital Structure, and Debt Overhang
We model dynamic investment, financing and default decisions of a firm, which begins its life with a collection of growth options. The firm exercises them optimally over time, and finances the costs of investment by adjusting its capital structure, which trades off the tax benefits with the distress cost of debt and the agency cost of investment distortions from potential debt overhang. Conflic...
متن کاملInvestment Cycles and Sovereign Debt Overhang
We characterize optimal taxation of foreign capital and optimal sovereign debt policy in a small open economy where the government cannot commit to policy, seeks to insure a risk averse domestic constituency, and is more impatient than the market. Optimal policy generates long-run cycles in both sovereign debt and foreign direct investment in an environment in which the first best capital stock...
متن کاملMacroeconomic Risk and Debt Overhang∗
Since corporate debt tends to be riskier in recessions, transfers from equity holders to debt holders that accompany corporate decisions also tend to concentrate in recessions. Such systematic risk exposures of debt overhang have important implications for corporate investment and financing decisions, and for the ex ante costs of debt overhang. Using a calibrated dynamic capital structure model...
متن کاملAsset Substitution, Debt Overhang, and Optimal Capital Structure
This article uses a contingent-claims valuation method to compare debt financing, investment, and risk choices of a firm adopting the second-best strategy with those of a firm adopting the first-best strategy. The former bears the agency costs, as conjectured by Jensen and Meckling (1976) and Myers (1977), because it chooses suboptimal investment timing and risk levels, while the latter is able...
متن کاملDebt, Ownership Structure, and R&D Investment
Financial factors and ownership structure are both part of the determinants of corporate R&D investment. Considering listed firms in the R&D intensive industries during the 2000s, this paper examines whether financial factors and ownership structure explain R&D investment in Japan. Following the methodology of Brown et al. (2009), which extends the dynamic investment model of Bond and Maghir (1...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2020
ISSN: 1556-5068
DOI: 10.2139/ssrn.3726577