2 edition of Managerial entrenchment and the choice of debt financing found in the catalog.
Managerial entrenchment and the choice of debt financing
Amadou N. R. Sy
|Statement||prepared by Amadou N.R. Sy.|
|Series||IMF working paper -- WP/99/94|
|Contributions||International Monetary Fund. Research Dept.|
|The Physical Object|
|Pagination||29 p. :|
|Number of Pages||29|
THE JOURNAL OF FINANCE. VOL. LII, NO. 4. SEPTEMBER Managerial Entrenchment and Capital Structure Decisions PHILIP G. BERGER, ELI OFEK, and DAVID L. YERMACK* ABSTRACT We study associations between managerial entrenchment and firms' capital struc-tures, with results generally suggesting that entrenched CEOs seek to avoid debt. In. MANAGERIAL OWNERSHIP, TAKEOVER DEFENSES, AND DEBT FINANCING MANAGERIAL OWNERSHIP, TAKEOVER DEFENSES, AND DEBT FINANCING Ağca, Şenay; Mansi, Sattar A. I. Introduction Recent theoretical research suggests that the empirical irregularities observed in the cross‐section of U.S. firms regarding their financing decisions can be .
Small and medium-sized enterprise (SME) financing is a topic of significant research interest to both academics and policy makers. This is because SMEs play a vital role in providing employment and sustaining economic growth in both developed and emerging economies such as China (Du et al. ).For example, according to the Chinese National Bureau of Statistics, SMEs account . * Department of Finance, Louisiana State University, Baton Rouge, LA , e‐mail: [email protected], phone: () ‐ This paper is previously titled as Managerial Entrenchment and the Debt‐Equity Choice.
Managerial Entrenchment and Capital structure decision. The efficient choice of debt (optimal for shareholders) generally differs from the entrenchment choice (optimal for managers whose objective is to maximize tenure). The Journal of Finance. 57 (6): – Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors. Usually, a project financing structure involves a number of equity investors, known as 'sponsors', and a 'syndicate' of banks or other lending institutions that provide loans to the operation.
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Amadou N Sy, "Managerial Entrenchment and the Choice of Debt Financing," IMF Working Papers /, International Monetary : RePEc:imf:imfwpa/Author: Amadou N Sy.
Get this from a library. Managerial entrenchment and the choice of debt financing. [Amadou N R Sy; International Monetary Fund. Research Department.] -- Recent developments in financial economics have studied the firm's choice between public and private debt.
This paper analyzes how managerial entrenchment influences the type of debt firms issue. Get this from a library. Managerial entrenchment and the choice of debt financing. [Amadou N R Sy; International Monetary Fund.
Research Department.] -- Analyzes the choice between public and private debt by an entrenched manager. The paper analyzes the choice between public and private debt by an entrenched manager. The model shows that when the firm`s credit risk is low, management issues public bonds because of the value.
The paper analyzes the choice between public and private debt by an entrenched manager. The model shows that when the firms credit risk is low, management issues public bonds because of the value gains from increased flexibility rather than reduced restrictions and monitoring.
In fact, managements expected private gains decrease as initial private debt Author: Amadou N Sy. than managerial entrenchment. The model predicts that β>0. To estimate Equat I regress the proportion of debt that matures in more than three, four or ﬁve years on proxies for managerial entrenchment and control variables.
I control for size, market to book, proﬁtability, tangibility, asset maturity, credit rating dummy, and investment. The managerial entrenchment hypothesis is primarily a demand side theory about the reluctance of managers to take on debt financing. On the other hand, the creditor alignment hypothesis primarily relies on the willingness of creditors to supply debt.
Managerial entrenchment and capital structure decision Associations between the two. There are associations between managerial entrenchment and capital structure decisions which mostly result on the fact that CEOs are reluctant to go into debt when funding an investment. The capital structure is the way that the company chooses to fund its own.
The Debt-Equity Choice - Volume 36 Issue 1 - Armen Hovakimian, Tim Opler, Sheridan Titman “ The Determinants of Capital Structure Choice.” Journal of Finance, 43 (), 1 – Zwiebel, J. “ Dynamic Capital Structure and Managerial Entrenchment.” American Economic Review, 86.
Berger et al. studied the effect of managerial entrenchment, managerial incentives and corporate governance on a firm’s choice of leverage in a single equation model. The authors included CEO tenure, CEO ownership of stock and options and various measures of board influence and monitoring as well as the standard financial control variables (e.
Download Managerial Entrenchment and the Choice of Debt Financing ebook free in PDF and EPUB Format. Managerial Entrenchment and the Choice of Debt Financing also available in docx and mobi.
Read hug kiss love online, read in mobile or Kindle. Several empirical studies have reported that managerial entrenchment is an important determinant of corporate financial policy. In this paper, we explain why a manager of a firm issues callable convertible debt from the viewpoint of managerial entrenchment.
The framework for the analysis is the entrenchment model of Zweibel (). Title: Managerial Entrenchment and the Choice of debt financing - WP/99/94 Created Date: 8/3/ PM. We now develop further the implications of managerial agency risk for bond covenants. Managerial entrenchment.
Agency risk for bondholders is especially important when managers are entrenched, i.e., cannot be easily separated from control, because entrenchment allows managers significant flexibility to pursue their own agenda.
2 In particular, opportunistic and risky investment choice by. A) The relative proportions of debt, equity, and other securities that a firm has outstanding constitute its capital structure. B) The most common choices are financing through equity alone and financing through a combination of debt and equity.
C) A projectʹs net present value (NPV) represents the value to the new investors of a firm. John and Litov () report a positive relation between managerial entrenchment and the use of debt finance.
In addition, we include an indicator variable set equal to 1 for financial firms, and. Building on the managerial entrenchment literature, we develop and test a novel perspective on payout policy that integrates the influence of internal governance mechanisms, investment opportunities, management compensation, and monitoring by large shareholders.
Because this kind of debt is senior to all exisiting creditors, it allows a firm that has filed for bankruptcy renewed access to financing to keep operating.
Who pays for financial distress costs. When securities are fairly priced, the original shareholders of a firm pay the present value of costs associatied with bankruptcy and financial distress.
According to the managerial entrenchment theory, managers choose capital structure so as to preserve their control of the firm. On the one hand, debt is costly for managers because they risk losing control in the event of default.
On the other hand, if they do not take advantage of the tax shield provided by debt, they risk losing control. Downloadable. We study associations between managerial entrenchment and firms' capital structures, with results generally suggesting that entrenched CEOs seek to avoid debt.
In a cross-sectional analysis, we find that leverage levels are lower when CEOs do not face pressure from either ownership and compensation incentives or active monitoring. Stulz, RenC,Managerial discretion and optimal financing policies, Journal of Financial Econom Titman, Sheridan, and Roberto Wessels,The determinants of capital structure choice, Journal of Fina Weisbach, Michael,Outside directors and CEO turnover, Journal of Financial Econom Published inthis second "Badass" book takes more of a financial angle than the first one.
Prepare to chuckle and roll your eyes. This book is candid and funny, and if you’re like many of us, you’ll recognize yourself and your own habits in its pages.
Debt financing also plays a more critical role in restricting managerial opportunism when the firm has a large amount of free cash flows (Jensen, ). The firm’s free cash flows (FRF) is computed as equivalent to the residual earnings (earnings plus depreciation net of interests, taxes and dividend) over total assets.