Conglomerate Entrenchment under Optimal Financial Contracting
نویسندگان
چکیده
منابع مشابه
Optimal Long-Term Financial Contracting
We develop an agency model of financial contracting. We derive long-term debt, a line of credit, and equity as optimal securities, capturing the debt coupon and maturity; the interest rate and limits on the credit line; inside versus outside equity; dividend policy; and capital structure dynamics. The optimal debt-equity ratio is history dependent, but debt and credit line terms are independent...
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We characterize the optimal long-term financial contract in a setting in which a risk-neutral agent with limited capital seeks external financing for a project which pays stochastic cash flows over many periods. These cash flows are unobservable and unverifiable by outside investors. The agent can be induced to pay investors via the threat of the loss of control of the project. After solving fo...
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We study a setting in which a principal provides an agent with funds to operate a rm. The agent is liquidity constrained and privately observes the revenue of the rm. In other words, the agent can divert revenue to projects that bene t only him. Time is discrete and in nite, and revenues are subject to stochastic shocks that are persistent over time. As in the iid case studied by Clementi and H...
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ژورنال
عنوان ژورنال: American Economic Review
سال: 2005
ISSN: 0002-8282
DOI: 10.1257/0002828054201260