The amount of capital necessary to support a portfolio of debt securities depends on the probability distribution of the portfolio loss. Consider a portfolio of loans, each of which is subject to default resulting in a loss to the lender. Suppose the portfolio is financed partly by equity capital and partly by borrowed funds. The credit quality of the lender's notes will depend on the probabili...

The scientific article is devoted to the analysis of priority directions state financing in conditions war, coordination fiscal and monetary policy instruments meet defense needs Ukraine determination causes Ukraine's public debt. In course study, main sources filling budget were analyzed. It established that tax non-tax revenues, income from capital transactions, transfers formed basis revenue...

We analyse the money-financed fiscal stimulus implemented in Venice during famine and plague of 1629–31, which was equivalent to a ‘net-worth helicopter money’ strategy – monetary expansion generating losses issuer. argue that aimed at reconciling need subsidize inhabitants suffering from containment policies with desire prevent an increase long-term government debt, but it generated much insta...

Numerous studies have presented scenarios regarding energy transition, including the computation of investment costs in various models. Although these project detailed pathways for different technologies, they do not distinguish between sources and types funding. They tell us what transition will cost, but how it to be financed. In this paper, we develop a methodology according which an appropr...

Theoretical background: The contemporary approach to public debt is multi-faceted. Debt incurred finance current expenses assessed differently than financing capital expenditure. This distinction also important from the point of view local authorities as part their budgetary policy. Each decision related incurring a has not only financial consequences, but made in political and image context. I...

this study empirically examines whether managers manipulate reported income through the timing of sales of long-lived assets and investments. several empirical implications of the income-smoothing and debt-equity hypothesis in the context of asset sales were tested. the findings are consistent with the timing of asset sales by managers so that the recognized accounting income from these sales s...

this paper examines firms' capital structure and their access to financial debt, notably bank loans. We find that the share of financial debt in total liabilities is, on average, smaller for small firms than for large ones. However, this is not because the typical small firm borrows less than a large firm, but because small firms are more likely not to borrow at all. For firms that do borrow, t...

We analyze optimal risk management strategies of a bank financed with deposits and equity in a one period model. The bank’s motivation for risk management comes from deposits which can lead to bank runs. In the event of such a run, liquidation costs arise. The hedging strategy that maximizes the value of equity is derived. We identify conditions under which well known results such as complete h...

The article studies how takeover defenses influence managerial incentives with respect to long term investments, excess liquidity and the amount of debt relative to equity. The article conducts a cross-sectional regression based on a sample of Danish listed firms, dealing explicitly with the problem of causation between the variables. Takeover defenses adopted by Danish firms mainly consist of ...

Dynamic models in which agents’ behavior depends on expectations of future prices or other endogenous variables can have steady states that are stationary equilibria for a wide variety of expectations rules, including rational expectations. When there are multiple steady states, stability is a criterion for selecting among them as predictions of long-run outcomes. The purpose of this paper is t...