This paper documents new and empirically important interactions between cash-balance leverage dynamics. Cash ratios typically vary widely over extended horizons, with dynamics remarkably similar to (and complementary with) those of capital structure. Leverage cash interact approximately as predicted by the internal-versus-external funding regimes in Myers Majluf (1984). is quite volatile when a...

We characterize equilibrium leverage dynamics in a trade-off model which the firm can continuously adjust and cannot commit to policy ex ante. While ratchet effect leads shareholders issue debt gradually over time, asset growth maturity cause mean-revert slowly toward target. Investors anticipate future issuance raise credit spreads, fully offsetting tax benefits of new debt. Shareholders are t...

One of the most popular univariate asymmetric conditional volatility models is the exponential GARCH (or EGARCH) specification. In addition to asymmetry, which captures the different effects on conditional volatility of positive and negative effects of equal magnitude, EGARCH can also accommodate leverage, which is the negative correlation between returns shocks and subsequent shocks to volatil...

One of the goals of the government is to increase the competitiveness of domestic firms to export goods and services. Moreover, the role of exports in many economic sectors has been emphasized. There are two essential requirements for developing non-oil exports: first, the presence of firms in export markets and increasing their competitiveness; second, the survival of them in international mar...

The Automobile Braking System has a crucial role for safety of the passenger and riding quality of the vehicle. The braking force mainly depends on normal reaction on the wheel and the coefficient of friction between the tire and the road surface. Whenever a vehicle is loaded, the normal reaction on the rear wheel is increased. Thus the amount of braking force required to halt the vehicle with ...

The purpose of this study was to examine the effect Corporate Social Responsibility, Capital Expenditure, Investment Decisions, and Leverage on Firm Value in consumer goods industry sector companies listed Indonesia Stock Exchange n 2016-2019 period. value show how effective is firm performance line with prosperity shareholders perception investors company. This research used a method quantitat...

We review the theory of leverage developed in collateral equilibrium models with incomplete markets. We explain how leverage tends to boost asset prices and create bubbles. We show how leverage can be endogenously determined in equilibrium and how it depends on volatility. We describe the dynamic feedback properties of leverage, volatility, and asset prices, in what we call the leverage cycle, ...

the corporate income tax rate plays a worthwhile role in developing fiscal and tax policies for companies, lawmakers and analysts. so, one of the most important issues in tax field, is to determine effective tax rates. the study and scientific calculations of the effective tax rates provide an enhanced tax justice and a careful study of tax pressure on taxpayers would be possible. the objective...

The literature on endogenous leverage until now shows how an increase in volatility reduces leverage. However, in order to explain procyclical leverage it assumes that bad news increases volatility. This paper explains for the first time why bad news are associated with high volatility. We show that, in a model with endogenous leverage and heterogenous beliefs, most agents have the incentive to...