Klock, Mark; Thies, Clifford F - In: The Financial Review 30 (1995) 3, pp. 387-98
In a world with agency costs and asymmetric information, managers will have difficulty raising external funds since they have incentives to overinvest. Stulz argues that this leads to an optimal level of debt since this is one way to bond cash flows and reduce managerial discretion. However,...