It has been argued that when management is more concerned with the firm’s survival than with profitability, it is efficient to use a levered capital structure and thereby commit to the transfer of the liquidation decision to lenders. Our paper analyzes this view in a setting where lenders may behave opportunistically when they control the liquidation decision — i.e., when there is a lender hold...

This article intends to estimate the optimal value of investment and human capital in R&D sector of Iranian economy using an augmented endogenous growth model. To do so, two issues have been studied. First, an endogenous growth model has been extended to include investment in R&D as an independent variable. In the framework of this model, in order to determine the optimal value of investment an...

This paper analyzes optimal linear taxes on capital and labor incomes in a life-cycle model of human capital investment, financial savings, and labor supply with heterogenous individuals. A dual income tax with positive marginal tax rates on not only labor but also capital income is optimal. The key function of the tax on capital income is to reduce labor tax distortions on human capital accumu...

Agency cost theory is an important branch of capital structural theory. Free cash flow has significant impact on agency cost. The combination of research on these two fields would help to build and extend the theoretical system. Based on agency cost theory, the present study firstly categorized the characteristics of free cash flow as well as the statistical methodologies. Furthermore, the exis...

Titman and Wessels (1988) have used alternative debt instruments and factor analysis techniques (LISREL approach) to study the theories of optimal capital structure. Dittmar and Thakor (2007) developed a new theory called “managerial investment autonomy” to explain that a firm’s stock price and its capital structure are simultaneously decided. The main purpose of this paper is to integrate the ...