We examine the relation between firms' debt maturity structures and the propensity to manage earnings. Our results indicate that (i) firms with more current debt are more susceptible to managing earnings, (ii) this relation is stronger for firms facing debt market constraints (those without investment grade debt) and (iii) auditor characteristics such as auditor quality and tenure help diminish...

A binomial lattice based framework for the analysis of finite investment options with finite operational phase is developed. Solutions for European and American type finite horizon investment options with optimal capital structure and a multi-stage investment setting with multiple debt issues are discussed. The analysis shows that optimal leverage ratios are not affected by option moneyness at ...

In this study, it is examined whether changes in the stock market index can be explained by the change in financial ratios. Financial statements of 11 conventional and 2 participation banks for a total of 13 banks (representing the essential part of the Turkish Banking Sector and constituting the BIST XBANK Stock Index) announced on a quarterly basis from 2002 to 2013 were extracted from the Pu...

The difficult economic situation demands very careful investments plans in education. This paper presents a financial analysis of the e-certification branch. It uses financial ratios in order to measure the liquidity, the activity, the debt and the profitability of the enterprises in the branch. Then it applies these ratios to a case study regarding European Computer Driving Licence (ECDL) Hell...

We examine whether the presence of alternative debt covenant designs (threshold tightness, covenants frequency and covenant interdependence) reduces the adverse effect of poor accounting quality on debt cost in the private lending market. Our results indicate that when lenders face borrowing firms characterized by low accounting quality (hereafter, low quality borrowers), the lender tends to in...

We propose a restructuring of U. S. Federal debt. All debt should be perpetual, paying coupons forever with no principal. The debt should be composed of the following: 1) Fixedvalue, floating-rate, electronically transferable debt. Such debt looks like a money-market fund, or reserves at the Fed, to an investor. 2) Nominal perpetuities. This debt pays a coupon of $1 per bond, forever. 3) Indexe...

This paper studies the effect of credit market competition, measured by the bargaining power of banks, on the agency costs of debt finance. The threshold of obtaining loan finance is shown to be independent of the relative bargaining power of the financier, while intensified credit market competition leads to lower lending rates and investment return distributions with lower, but less risky ret...

Almost every paper I have ever read on infrastructure finance focuses on the achievement of what market practitioners believe is the Holy Grail of infrastructure finance. As PwC (2013) has stated in a recent publication, ‘[a] logical infrastructure project debt market would use short-term bank debt markets e.g. construction finance, with refinancing into the long-term institutional markets as s...

I demonstrate that non-financial corporations act as cross-market arbitrageurs in their own securities. Firms use one type of security to replace another in response to shifts in relative valuations, inducing negatively-correlated financing flows in different markets. Net equity repurchases and net debt issuance both increase when the expected returns on debt are particularly low, or when the e...