Agency Problems and Capital Expenditure Announcements
نویسندگان
چکیده
منابع مشابه
Agency Problems, Firm Valuation, and Capital Structure
This paper studies the optimal contracting problem in a general cashow setup, and offers a framework to quantitatively assess the impact of agency problems. A closed form solution is obtained in the square-root mean-reverting cash ow process. In the geometric Brownian cashow setup, we embed the agency problem into Leland (1994), and nd that the debt-overhang problem lowers the optimal leverage....
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U.S. multinational corporations (MNCs) hold significant amounts of cash abroad. Using a handcollected sample of large U.S. MNCs, we find that the percentage of cash trapped overseas has a significantly negative impact on the market value of a firm’s cash holdings. Such negative effect is more pronounced when firms are subject to higher repatriation tax rate, when firms have higher costs of rais...
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The structure of developed economies has changed radically in recent decades. As late as the 1960s, it was reasonable to describe the economy in terms of three stages of production: primary production—of agricultural and mineral raw materials; secondary production—a manufacturing industry that transformed raw materials into items of final consumption; tertiary production—a sector that provided ...
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The joint determination of capital structure and investment risk is examined. Optimal capital structure re ects both the tax advantages of debt less default costs (Modigliani-Miller), and the agency costs resulting from asset substitution (Jensen-Meckling). Agency costs restrict leverage and debt maturity and increase yield spreads, but their importance is relatively small for the range of envi...
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ژورنال
عنوان ژورنال: The Journal of Business
سال: 2004
ISSN: 0021-9398,1537-5374
DOI: 10.1086/381274