Agency costs of Debt in Conglomerate Firms
| Autor: | Michela Altieri |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2022 |
| Předmět: |
Diversified firms
agency costs of debt coinsurance internal capital markets yield spreads Economics and Econometrics media_common.quotation_subject yield spreads Agency cost Monetary economics internal capital markets Unobservable Incentive Accounting reform Accounting Debt Cash flow Asset (economics) Business Volatility (finance) agency costs of debt Finance media_common Diversified firms coinsurance |
| Zdroj: | M. Altieri |
| Popis: | I use an accounting reform to assess the agency cost of debt in diversified firms. Those firms that switch from single to multiple segments following the reform suffer a 12% increase in their bond spread when compared with their stand-alone peers. Consistent with lenders anticipating underinvestment and asset-substitution incentives, diversified firms with high cash-flow volatility across divisions suffer the highest increase in borrowing costs. I employ a novel approach that allows abstracting from unobservable characteristics that would otherwise influence the pricing of diversified firms’ debt. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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