We examine capital structure changes to investigate the impact of SFAS No. 13 on lessees. While this accounting standard essentially rearranged capital lease disclosures (from footnotes to the balance sheet), mandated capitalization substantially altered key accounting ratios. Our results document a systematic substitution from capital leases to operating leases and nonlease sources of financin...

I 1 . The debtor groups and the movement of debt ratios . . . . . . . 159 A . The debtor groups . . . . . . . . . . . . . . . . . . . . . . 159 B . Recent trade developments for the debtor groups . . . . . . 160 C . The evolution of debt ratios . . . . . . . . . . . . . . . . . 163 Ill . Developing country-OECD linkages and the debt model . . . . . . 166 A . The debt model . . . . . . . . . . ....

This research is based on financial distress or distress, which negatively impacts the company, marked by its inability to fulfill obligations at maturity. phenomenon can be an early warning related further problems, and overcome predicting as possible. prediction essential for management company owners anticipate potential bankruptcy. The formulations in this study include whether inflation af...

We replicate Reinhart and Rogoff (2010a and 2010b) and find that coding errors, selective exclusion of available data, and unconventional weighting of summary statistics lead to serious errors that inaccurately represent the relationship between public debt and GDP growth among 20 advanced economies in the postwar period. Our finding is that when properly calculated, the average real GDP growth...

I examine how financially distressed firms choose among three alternatives: traditional Chapter 11 bankruptcy, prepackaged bankruptcy, and out-of-court restructuring. In doing so, I investigate firm performance and capital structure, as well as the previously undocumented role of managerial discretion. My sample consists of 198 observations and 174 poorly performing firms that start restructuri...

In this paper, we analyze whether the total debt ratios and bank loan ratios of Chinese listed companies had any impact on their fixed investment in 2001-2006, and whether this impact, if it existed, differed among companies with differing investment opportunities. Our results are as follows. First, our analysis reveals that the total debt ratio (bank loan ratio) did have a negative impact on f...

Contingent capital in the form of debt that converts to equity when a bank faces financial distress has been proposed as a mechanism to enhance financial stability and avoid costly government rescues. Specific proposals vary in their choice of conversion trigger and conversion mechanism. We analyze the case of contingent capital with a capital-ratio trigger and partial and on-going conversion. ...

The paper examines the interrelationship between fiscal and monetary policy in a two-country monetary union. The worst scenario occurs when an independent central bank (CB) sets the nominal interest rate and responds to rising government debt/GDP ratios by monetisation. The result is high inflation, high debt/GDP ratios and a large public sector. Government debt and inflation are contained if t...

Most capital structure models assume that the decision of how much debt to issue is a static choice. In practice, however, firms adjust outstanding debt levels in response to changes in firm value. In this article, we solve for the optimal dynamic capital strategy of a firm and investigate the implications for optimal leverage ratios and the magnitude of the tax benefits to debt. Below, we cons...