Whether proportionate consolidation (PC) or the equity method (EM) provides more informative financial statements has been controversial. This study uses data from listed companies in Hong Kong to investigate the value relevance of EM compared to PC during 2005-2008 when the local word-for-word...

Whether proportionate consolidation (PC) or the equity method (EM) provides more informative financial statements is a controversial issue. This study uses data from listed companies in Hong Kong to investigate the value relevance of the EM compared with PC during 2005-2008 when the local...

We analyze public interventions to alleviate debt overhang among private rms when the government has limited information and limited resources. We compare the e¢ ciency of buying equity, purchasing existing assets, and providing debt guarantees. With sym- metric information, all the...

We analyze government interventions to recapitalize a banking sector that restricts lending to firms because of debt overhang. We find that the efficient recapitalization program injects capital against preferred stock plus warrants and conditions implementation on sufficient bank participation....