Showing 1 - 10 of 22
This paper shows that illiquid growth opportunities crucially impact the agency costs of risky debt. If the value of these growth opportunities is sufficiently high, they reverse riskshifting incentives into risk-avoidance incentives, creating a new agency cost of debt. They can also eliminate...
Persistent link: https://www.econbiz.de/10012768896
This paper shows that illiquid growth opportunities crucially impact the agency costs of risky debt. If the value of these growth opportunities is sufficiently high, they reverse risk shifting incentives into risk-avoidance incentives, creating a new agency cost of debt. They can also eliminate...
Persistent link: https://www.econbiz.de/10012769128
We test several hypotheses on how takeover premium is related to investors’ divergence of opinion on the target’s equity value. We show that the total takeover premium, the pre-announcement target stock price runup and the post-announcement stock price markup are all higher when investors...
Persistent link: https://www.econbiz.de/10013037577
This paper investigates the design of privatization mechanisms in emerging market economies. We identify an emerging market economy by the political constraints that limit the set of viable privatization mechanisms. Our objective is to explain the striking diversity of privatization mechanisms...
Persistent link: https://www.econbiz.de/10012765868
This paper investigates the design of privatization mechanisms in emerging marketeconomies characterized by political constraints that limit the set of viable privatization mechanisms. Our objective is to explain the striking diversity of privatization mechanisms observed in practice and the...
Persistent link: https://www.econbiz.de/10012765876
We analyze the impact of option trading and margin rules on the behavior of informed traders and on the micro structure of stock and option markets. In the absence of binding margin requirements, the introduction of an options market causes informed traders to exhibit a relative trading bias...
Persistent link: https://www.econbiz.de/10012765912
In this paper we examine a model of the optimal financial claim for a bank in a world where a borrowing firm s uninformed stakeholders depend upon the bank for truthful information about the firm s evolving financial condition. In particular, stakeholders rely upon the bank to reveal whether the...
Persistent link: https://www.econbiz.de/10012768604
Recent empirical work has documented the tendency of corporations to reset strike prices on previously-awarded executive stock option grants when declining stock prices have pushed these options out-of-the-money. This practice has been criticized as counter-productive since it weakens incentives...
Persistent link: https://www.econbiz.de/10012768695
We analyze the impact of option trading and margin rules on the behavior of informed traders and on the microstructure of stock and option markets. In the absence of binding margin requirements, the introduction of an options market causes informed traders to exhibit a relative trading bias...
Persistent link: https://www.econbiz.de/10012768713
We analyze the impact of option trading and margin rules on the behavior of informed traders and on the microstructure of stock and option markets. In the absence of binding margin requirements, the introduction of an options market causes informed traders to exhibit a relative trading bias...
Persistent link: https://www.econbiz.de/10012768826