The COVID-19 pandemic has triggered a massive increase in global debt levels and exacerbated the trade-offs between benefits costs of accumulating government debt. This paper examines these by putting recent boom into historical context. It reports three major findings. First, during 2020 recession, both private rose to record highs, at their fastest single-year pace, five decades. Second, debt...

The International Energy Agency (IEA) estimates that $24.5 trillion of energy efficiency (EE) investments will be needed through 2040. Debt- and self-financed projects are expected to contribute only one-third this capital due multiple barriers. On the one hand, require upfront from companies’ budgets spent on EE, which most would regard as a noncore activity. other parties face hurdles in debt...

Rhodes-Kropf and Viswanathan (2004) suggest an adverse selection role of corporate cash reserve. Specifically, if investors know a bidder does not have to issue to invest, an attempt to do so sends a strong pessimistic signal of overvaluation. Despite its intuitiveness, this notion has not been explicitly studied in the empirical literature. Using a sample of acquisitions that are solely financ...

We develop a dynamic model to assess the effects of liquidity and leverage requirements on banks’ insolvency risk. The model features endogenous capital structure, liquid asset holdings, payout, and default decisions. In the model, banks face taxation, flotation costs of securities, and default costs. They are financed with equity, insured deposits, and risky debt. Using the model, we show that...

In this paper the performance of a sample of German companies is measured by comparing the initially invested capital adjusted for cost of capital, dividends paid, share repurchases and equity raised with the market value at the end of the holding period. All possible holding periods between 1987 and 2000 are covered. The sample is subdivided into companies listed in the DAX-, MDAXand SMAX-inde...

This study explores the importance of financial constraints and product market competition on share repurchase decision. We find that financially constrained firms are more likely to conduct debt-financed repurchases. Financially unconstrained firms, however, tend repurchases only when debt conditions favourable. also level industry is a significant factor behind managers’ decisions. High (low)...

Abstract We present a dynamic, continuous-time model in which risk averse inside equityholders set bank’s lending, payout, and financing policies, the exposure of bank assets to crashes. examine whether bailouts encourage excessive lending taking compared liquidation or bail-ins with debt-to-equity conversion debt write-downs. The effects prevailing insolvency resolution mechanism (IRM) on prob...

Debt has become commonplace to meet the needs of human life. However, because it is a loan, must be returned, and sometimes not everyone can return at agreed time. Therefore, Islam offers solution in form Hiwalah Contract. transfer debt from person who owes someone else able pay it. unique system suitable for adaptation by humans, part life muamalah. The legal basis implementing Qur'an, Hadith,...