Leverage

CEO Overconfidence and the Speed of Adjustment of Cash Holdings

We examine the links between CEO overconfidence, the speed of adjustment (SOA) of cash holdings, and firm value for listed US firms. First, we find that...

Borrow Cheap, Buy High? The Determinants of Leverage and Pricing in Buyouts

Private equity funds pay particular attention to capital structure when executing leveraged buyouts, creating an interesting setting for examining...

Bankruptcy's Identity Crisis

The large companies that currently file for Chapter 11 look very different than the typical Chapter 11 cases of the past. The liability side of debtors’...

Leverage and Value Creation in Holding-Subsidiary Structures

This paper determines optimal capital structure and value of Holding-Subsidiary structures (HS), when there is a trade-off between bankruptcy costs...

Loans to Chapter 11 Firms: Contract Design and Pricing

With a hand-collected set of 545 debtor-in-possession (DIP) loan facilities, 2002-2019, we show that these short-term loans are highly...

The Law and Economics of Shadow Banking

This essay discusses the economic case for regulating shadow banking. Focusing on systemic risk, shadow banking is defined as leveraging on collateral...

Capital structure and managerial compensation: the effects of remuneration seniority

LBO Financing

We rationalize why leverage in buyouts differs from corporate leverage at large by merging two canonical strands of buyout theory that examine...

Competition for Flow and Short-Termism in Activism

We develop a dual-layered agency model to study blockholder monitoring by activist funds that compete for investor flow. Competition for flow affects...