Managerial Entrenchment And Capital Structure
Download Managerial Entrenchment And Capital Structure full books in PDF, epub, and Kindle. Read online free Managerial Entrenchment And Capital Structure ebook anywhere anytime directly on your device. Fast Download speed and no annoying ads. We cannot guarantee that every ebooks is available!
| Author | : Philip G. Berger |
| Publisher | : |
| Total Pages | : |
| Release | : 1997 |
| Genre | : |
| ISBN | : |
Download Managerial Entrenchment and Capital Structure Decisions Book in PDF, Epub and Kindle
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. In an analysis of leverage changes, we find that leverage increases in the aftermath of entrenchment-reducing shocks to managerial security, including unsuccessful tender offers, involuntary CEO replacements, and the addition to the board of major stockholders.
| Author | : Berger Philip G. |
| Publisher | : |
| Total Pages | : 38 |
| Release | : 2008 |
| Genre | : |
| ISBN | : |
Download Managerial Entrenchment and Capital Structure Decisions Book in PDF, Epub and Kindle
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. In an analysis of leverage changes, we find that leverage increases in the aftermath of entrenchment-reducing shocks to managerial security, including unsuccessful tender offers, involuntary CEO replacements, and the addition to the board of major stockholders.
| Author | : Philip G. Berger |
| Publisher | : |
| Total Pages | : 26 |
| Release | : 1995 |
| Genre | : Capital |
| ISBN | : |
Download Managerial Entrenchment and Capital Structure Decisions Book in PDF, Epub and Kindle
| Author | : Shuangshuang Ji |
| Publisher | : |
| Total Pages | : 61 |
| Release | : 2018 |
| Genre | : |
| ISBN | : |
Download Managerial Entrenchment and Capital Structure Book in PDF, Epub and Kindle
This paper empirically examines how diversification influences the relation between corporate governance and capital structure. Consistent with the creditor alignment hypothesis, we find a positive relation between managerial entrenchment and leverage in diversified firms. In contrast, we find a negative relation between managerial entrenchment and leverage in focused firms, which supports the managerial entrenchment hypothesis. These effects are stronger or only exist in samples with low excess values, which supports the agency channel through which governance influences leverage decisions. The results are robust to different measures of leverage, diversification, and governance, and continue to hold when we correct for selection bias and account for the joint endogeneity of leverage, diversification, and governance. Our evidence shows that the conflict in the literature on the relation between leverage and managerial entrenchments is because earlier empirical studies do not condition on the diversification status of firms. Entrenched managers in focused firms eschew leverage, whereas entrenched managers in diversified firms take advantage of their better access to debt finance and use more financial leverage.
| Author | : Mr.Amadou N. R. Sy |
| Publisher | : International Monetary Fund |
| Total Pages | : 30 |
| Release | : 1999-07-01 |
| Genre | : Business & Economics |
| ISBN | : 1451851707 |
Download Managerial Entrenchment and the Choice of Debt Financing Book in PDF, Epub and Kindle
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 gains from increased flexibility rather than reduced restrictions and monitoring. In fact, management’s expected private gains decrease as initial private debt restrictions are selectively relaxed. In contrast, when credit risk is high, management issues private debt because of the value gains and private benefits from renegotiating more stringent restrictions. When the maturity of private debt is shortened, however, privately and publicly placed bonds can be preferred to bank debt.
| Author | : Jeffrey Zwiebel |
| Publisher | : |
| Total Pages | : |
| Release | : 1997 |
| Genre | : |
| ISBN | : |
Download Dynamic Capital Structure Under Managerial Entrenchment Book in PDF, Epub and Kindle
This paper develops a model in which managers voluntarily choose debt to credibly constrain their own future empire- building. Dynamically consistent capital structure is derived as the optimal response in each period of partially entrenched managers trading-off empire-building ambitions with the need to ensure sufficient efficiency to prevent control challenges. A policy of capital structure coordinated with dividends follows naturally, as do implications for the level, frequency, and maturity structure of debt as a function of outside investment opportunities. Additionally, the model yields new testable implications for security design, and changes in debt and empire-building over managerial careers.
| Author | : Hao Wang |
| Publisher | : |
| Total Pages | : 276 |
| Release | : 2007 |
| Genre | : Corporations |
| ISBN | : |
Download Three Essays on Corporate Debt, Capital Structure and Managerial Entrenchment Book in PDF, Epub and Kindle
"In the third essay, we develop a valuation model that simultaneously captures credit risk and interest rate risk, and apply it to study the valuation of putable corporate bonds. We ask what risks put features provide insurance against in practice - credit risk, liquidity risk or interest rate risk - and to what degree? We find that they reduce the components of all three risks in bond spreads. The most important, perhaps surprisingly is default or spread risk, followed by term structure risk. The reduction in the liquidity component is present but rather small." --
| Author | : Abe de Jong |
| Publisher | : |
| Total Pages | : 42 |
| Release | : 2001 |
| Genre | : |
| ISBN | : |
Download An Empirical Analysis of Incremental Capital Structure Decisions Under Managerial Entrenchment Book in PDF, Epub and Kindle
We study incremental capital structure decisions of Dutch companies. From 1977 to 1996 these companies have made 110 issues of public and private seasoned equity and 137 public issues of straight debt. Managers of Dutch companies are entrenched. For this reason a discrepancy exists between managerial decisions and shareholder reactions. Confirming Zwiebel (1996) we find that Dutch managers avoid the disciplining role of debt allowing them to overinvest. However, the market reactions show that this overinvestment behavior is recognized. We do not find a confirmation of the adverse selection model of Myers and Majluf (1984). This is probably due to the entrenchment of managers and the prevalence of rights issues.
| Author | : Luigi Zingales |
| Publisher | : |
| Total Pages | : 42 |
| Release | : 2010 |
| Genre | : |
| ISBN | : |
Download Capital Structure Choice When Managers are in Control Book in PDF, Epub and Kindle
Recent capital structure theories have emphasized the role of debt in minimizing the agency costs that arise from the separation between ownership and control. In this paper we argue that capital structure choices themselves are affected by the same agency problem. We show that, in general, the shareholders' and the manager's capital structure choices differ not only in their levels, but also in their sensitivities to the cost of financial distress and taxes. We argue that only the managerial perspective can explain why firms are generally reluctant to issue equity, why they issue it only following a stock price run-up, and why Corporate America recently deleveraged under the same tax system that supposedly generated the increase in leverage in the 1980s.
| Author | : Yossi Spiegel |
| Publisher | : |
| Total Pages | : 50 |
| Release | : 1999 |
| Genre | : |
| ISBN | : |
Download Managerial Compensation and Capital Structure Book in PDF, Epub and Kindle
We investigate the interaction between financial structure and managerial compensation in the context of a managerial entrenchment model in the spirit of Shleifer and Vishny (1989). We show that risky debt affects both the probability of managerial replacement and the manager's wage if he is retained by the firm. Our model yields a rich set of predictions including the following:The market values of equity and debt decrease if the manager is replaced. Moreover, the expected cash flow of firms that retain their managers exceeds that of firms that replace their managers.Firms that publicly announce the adoption of a new managerial compensation plan should experience positive price reactions in the capital market as well as strong positive performance following the adoption.Managers of firms with risky debt outstanding are promised lower severance payments (golden parachute) than managers of firms that do not have risky debt.Controlling for firm's size, leverage, managerial compensation, and the cash flow of firms that retain their managers are positively correlated.Controlling for firm's size, the probability of managerial turnover and firm value are negatively correlated.
