Debt, Equity, and Information
| Autor: | Matthias M. M. Buehlmaier |
|---|---|
| Rok vydání: | 2012 |
| Předmět: |
Economics and Econometrics
Equity risk Applied Mathematics media_common.quotation_subject Equity ratio Equity (finance) Financial system Monetary economics Gearing ratio Private equity fund Debt-to-equity ratio Information asymmetry Bankruptcy Return on equity Debt Optimal allocation Economics Equity value Dividend Business Stock (geology) Equity capital markets media_common Diversity (business) |
| Zdroj: | SSRN Electronic Journal. |
| ISSN: | 1556-5068 |
| DOI: | 10.2139/ssrn.1673132 |
| Popis: | Most firms issue financial assets such as debt or equity (e.g. bonds or stock) to outside investors. While these financial assets differ greatly in their characteristics, their diversity has received little attention in the literature. Filling this important gap in the literature, this paper views debt and equity as financial contracts, and asks why they are optimal instead of other financial contracts. By endogenizing the bankruptcy process, this paper shows how debt and equity arise as a consequence of an optimal allocation of cash-flow rights and monitoring rights, and how equity leads to dividend signaling. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|