Managerial Entrenchment and the Choice of Debt Financing:
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, managem...
Gespeichert in:
1. Verfasser: | |
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Format: | Elektronisch E-Book |
Sprache: | English |
Veröffentlicht: |
Washington, D.C
International Monetary Fund
1999
|
Schriftenreihe: | IMF Working Papers
Working Paper No. 99/94 |
Online-Zugang: | UBW01 UEI01 LCO01 SBR01 UER01 SBG01 UBG01 FAN01 UBT01 FKE01 UBY01 UBA01 FLA01 UBM01 UPA01 UBR01 FHA01 FNU01 BSB01 TUM01 Volltext |
Zusammenfassung: | 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 |
Beschreibung: | 1 Online-Ressource (29 p) |
ISBN: | 1451851707 9781451851700 |
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spelling | Sy, Amadou N. R. Verfasser aut Managerial Entrenchment and the Choice of Debt Financing Sy, Amadou N. R Washington, D.C International Monetary Fund 1999 1 Online-Ressource (29 p) txt rdacontent c rdamedia cr rdacarrier IMF Working Papers Working Paper No. 99/94 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 Online-Ausg http://elibrary.imf.org/view/IMF001/04509-9781451851700/04509-9781451851700/04509-9781451851700.xml Verlag URL des Erstveröffentlichers Volltext |
spellingShingle | Sy, Amadou N. R. Managerial Entrenchment and the Choice of Debt Financing |
title | Managerial Entrenchment and the Choice of Debt Financing |
title_auth | Managerial Entrenchment and the Choice of Debt Financing |
title_exact_search | Managerial Entrenchment and the Choice of Debt Financing |
title_exact_search_txtP | Managerial Entrenchment and the Choice of Debt Financing |
title_full | Managerial Entrenchment and the Choice of Debt Financing Sy, Amadou N. R |
title_fullStr | Managerial Entrenchment and the Choice of Debt Financing Sy, Amadou N. R |
title_full_unstemmed | Managerial Entrenchment and the Choice of Debt Financing Sy, Amadou N. R |
title_short | Managerial Entrenchment and the Choice of Debt Financing |
title_sort | managerial entrenchment and the choice of debt financing |
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