Switching to a poor business activity: Optimal capital structure, agency costs and covenant rules

被引：7

作者：

Décamps J.-P. ^{[1
,2
]}

Djembissi B. ^{[1
]}

机构：

[1] GREMAQ-IDEI, Université de Toulouse 1, 31000 Toulouse

[2] Europlace Institute of Finance, 75001 Paris

来源：

Annals of Finance | 2007年 / 3卷 / 3期

关键词：

Capital structure; Covenant rules; Stockholder-debtholder conflict;

D O I：

10.1007/s10436-006-0049-8

中图分类号：

学科分类号：

摘要：

We address the issue of modeling and quantifying the asset substitution problem in a setting where equityholders decisions alter both the volatility and the return of the firm cash flows. Our results contrast with those obtained in models where the agency problem is reduced to a pure risk-shifting problem. We find larger agency costs and lower optimal leverages. We identify the bankruptcy trigger written in debt indenture, which maximizes ex-ante firm value, given that equityholders will ex-post be able to risk-shift. Our model highlights the tradeoff between ex-post inefficient behavior of equityholders and inefficient covenant restrictions. © Springer-Verlag 2006.

引用

页码：389 / 409

页数：20

共 20 条

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