Equity-Debtholder Conflicts and Capital Structure

Fiduciary Duties and Equity-Debtholder Conflicts

Fiduciary Duties and Equity‐Debtholder Conflicts

Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author. Abstract. We use an important legal event as a natural experiment to examine the effect of management fiduciary duties on equity‐debt conflicts. A 1991 Delawar...

Corporate Governance and Capital Structure Dynamics

We develop a dynamic tradeoff model to examine the importance of manager-shareholder conflicts in capital structure choice. In the model, firms face taxation, refinancing costs, and liquidation costs. Managers own a fraction of the firms’ equity, capture part of the free cash flow to equity as private benefits, and have control over financing decisions. Using data on leverage choices and the mo...

The Relationship between Earning Management and Capital Structure

This paper analyzes the relationship between capital structure and earning management. For analysing we used 119 non-financial companies that listed in Tehran Stock Exchange from 2000 to 2008. The researchers will focus on comparing the Jones Model and the Modified Jones Model, which are the two most frequently used model in empirical analysis nowadays. Earnings management is a kind of manageme...

Manager Characteristics and Capital Structure: Theory and Evidence

We investigate the effects of manager characteristics on capital structure. We first develop a dynamic structural model that incorporates managerial discretion in effort and financing, as well as agency conflicts between managers and outside investors. We derive the manager’s dynamic contract and implement it through financial securities. This leads to a dynamic capital structure for the firm c...