Trying To Understand All-Equity Firms
... that had no interest payments and no long term debt for at least one year in the twenty years covered by Compustat data base. Using a Logit function they tested whether the trade-off theory of capital structure can describe the debt policy of all-equity firms by relating the probability of borrowing ...
... that had no interest payments and no long term debt for at least one year in the twenty years covered by Compustat data base. Using a Logit function they tested whether the trade-off theory of capital structure can describe the debt policy of all-equity firms by relating the probability of borrowing ...
A Small Open Economy Model with Sovereign
... The model’s equilibrium results are consistent with the fact that countries are more likely to default in bad times or when facing higher levels of outstanding debt. They also suggest that the maximum level of indebtedness relative to output, i.e. the maximum risky debt to output ratio, that an econ ...
... The model’s equilibrium results are consistent with the fact that countries are more likely to default in bad times or when facing higher levels of outstanding debt. They also suggest that the maximum level of indebtedness relative to output, i.e. the maximum risky debt to output ratio, that an econ ...
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... Preemptive renegotiations can also be optimal for creditors, if the recovery rate they receive in the preemptive deal is higher than the present value of the debt they hold, i.e., if a high haircut is expected ex-post. The country and its creditors can also decide to wait and forgo the option to res ...
... Preemptive renegotiations can also be optimal for creditors, if the recovery rate they receive in the preemptive deal is higher than the present value of the debt they hold, i.e., if a high haircut is expected ex-post. The country and its creditors can also decide to wait and forgo the option to res ...
LBO General Discussion
... • The remainder of the required 18 to 20 percent all-in-return consists of warrants to buy common stock, which the investor values based on the outlook of the company, or incremental interest paid on a "pay-in-kind" or PIK basis. • The fee for raising the money runs between two and three percent of ...
... • The remainder of the required 18 to 20 percent all-in-return consists of warrants to buy common stock, which the investor values based on the outlook of the company, or incremental interest paid on a "pay-in-kind" or PIK basis. • The fee for raising the money runs between two and three percent of ...
The “Mystery of the Printing Press” Monetary Policy and Self
... the central bank may not have the ability to expand its balance sheet on a su¢ cient scale to e¤ectively backstop government debt. On the other hand, even if a backstop rules out belief-driven crises, large-scale purchases of government debt may foreshadow large losses on the central bank balance sh ...
... the central bank may not have the ability to expand its balance sheet on a su¢ cient scale to e¤ectively backstop government debt. On the other hand, even if a backstop rules out belief-driven crises, large-scale purchases of government debt may foreshadow large losses on the central bank balance sh ...
Working Paper 17-6: Does Greece Need More Official Debt Relief? If
... 4. If the Eurogroup wishes to avoid the latter, it will become necessary to either (1) lower the funding costs of future EFSF loans significantly below current official projections, by attempting to take advantage of the still very low interest rate environment, (2) extend the scope of the restructu ...
... 4. If the Eurogroup wishes to avoid the latter, it will become necessary to either (1) lower the funding costs of future EFSF loans significantly below current official projections, by attempting to take advantage of the still very low interest rate environment, (2) extend the scope of the restructu ...
Debt Levels and Share Price - a Sensitivity Analysis on Vestas
... In their seminal work, Miller and Modigliani (1958) posit that in a perfect market, the capital structure of the company is irrelevant and therefore, has no influence on the value of the company. However, their theory was based on numerous and quite restrictive assumptions which make their conclusio ...
... In their seminal work, Miller and Modigliani (1958) posit that in a perfect market, the capital structure of the company is irrelevant and therefore, has no influence on the value of the company. However, their theory was based on numerous and quite restrictive assumptions which make their conclusio ...
A Financial Optimization Approach to Quantitative
... preference set by ourselves, since the government has not expressed its risk preference quantitatively. We also conclude that financial optimization is applicable on the government debt management problem, although some work remains before the method can be incorporated into the strategic work of th ...
... preference set by ourselves, since the government has not expressed its risk preference quantitatively. We also conclude that financial optimization is applicable on the government debt management problem, although some work remains before the method can be incorporated into the strategic work of th ...
Transactions Costs and Capital Structure Choice: Evidence from
... capital structures cite transactions costs as the reason why firms do not instantaneously adjust their leverage ratios in response to changes in their target ratios. However, research is mixed on whether transactions costs are large enough to plausibly explain leverage choices by most firms (Myers ( ...
... capital structures cite transactions costs as the reason why firms do not instantaneously adjust their leverage ratios in response to changes in their target ratios. However, research is mixed on whether transactions costs are large enough to plausibly explain leverage choices by most firms (Myers ( ...
report - Standard Chartered Bank
... We examine existing and potential future policies that China may adopt to deal with its rising bad loan problem. The debt landscape is more complicated today than it was following the 1990s credit boom. Our analysis of external debt vulnerabilities shows that most Asian ...
... We examine existing and potential future policies that China may adopt to deal with its rising bad loan problem. The debt landscape is more complicated today than it was following the 1990s credit boom. Our analysis of external debt vulnerabilities shows that most Asian ...
DOC 477KB - Board of Taxation
... Division 974, the tax treatment of interests in an entity was primarily driven by the legal form of the interest, regardless of its economic substance, with a small number of exceptions that looked to deny equity treatment to some shares and to deny full debt treatment to some loan arrangements. Thi ...
... Division 974, the tax treatment of interests in an entity was primarily driven by the legal form of the interest, regardless of its economic substance, with a small number of exceptions that looked to deny equity treatment to some shares and to deny full debt treatment to some loan arrangements. Thi ...
Monetary and Fiscal Policy with Sovereign Default
... bond prices to productivity shocks and bond issuance that is induced by sovereign risk impedes the government’s ability to smooth tax distortions across states. Relative to an economy without default 3 While the share of nominal domestic debt held by foreign residents has increased in recent years, ...
... bond prices to productivity shocks and bond issuance that is induced by sovereign risk impedes the government’s ability to smooth tax distortions across states. Relative to an economy without default 3 While the share of nominal domestic debt held by foreign residents has increased in recent years, ...
NBER WORKING PAPER SERIES INVESTMENT CYCLES AND SOVEREIGN DEBT OVERHANG Mark Aguiar
... The result that there is no distortion of capital holds regardless of the government’s discount rate as long as the government can commit. What if the government cannot commit to its promised tax and debt plan? While the sunk nature of capital allows the government to insure domestic agents, it als ...
... The result that there is no distortion of capital holds regardless of the government’s discount rate as long as the government can commit. What if the government cannot commit to its promised tax and debt plan? While the sunk nature of capital allows the government to insure domestic agents, it als ...
NBER WORKING PAPER SERIES INTERNATIONAL RESERVES AND ROLLOVER RISK Javier Bianchi
... do not allow the government to accumulate assets for insurance purposes. Alfaro and Kanczuk (2009) study a model with one-period debt where assets are only useful for transferring resources to default states. In contrast, we study the role of reserves in hedging against rollover risk. Telyukova (20 ...
... do not allow the government to accumulate assets for insurance purposes. Alfaro and Kanczuk (2009) study a model with one-period debt where assets are only useful for transferring resources to default states. In contrast, we study the role of reserves in hedging against rollover risk. Telyukova (20 ...
What is a Sustainable Public Debt?∗
... increases in U.S. capital income taxes (assuming European taxes are constant) generate significantly smaller increases in the present value of U.S. primary balances than if the U.S. implemented the same taxes under financial autarky. The model also predicts that at its current capital tax rate, Euro ...
... increases in U.S. capital income taxes (assuming European taxes are constant) generate significantly smaller increases in the present value of U.S. primary balances than if the U.S. implemented the same taxes under financial autarky. The model also predicts that at its current capital tax rate, Euro ...
Hedging and Speculating with Interest Rate Swaps
... interest rate derivatives usage over time and to compare it to the variation in the cross section. Using our hand-collected data covering interest rate swap activity for 1,854 firms for up to 10 years, we find that the time-series variation in swap usage is of similar magnitude as the cross-sectiona ...
... interest rate derivatives usage over time and to compare it to the variation in the cross section. Using our hand-collected data covering interest rate swap activity for 1,854 firms for up to 10 years, we find that the time-series variation in swap usage is of similar magnitude as the cross-sectiona ...
household debt and unemployment
... ubiquitous friction in the credit market. Specifically, we introduce heterogeneity in households, so that there are good households that want to work at the late date and bad households that never work. Banks have a screening technology that allows them to screen out bad households at a cost. The an ...
... ubiquitous friction in the credit market. Specifically, we introduce heterogeneity in households, so that there are good households that want to work at the late date and bad households that never work. Banks have a screening technology that allows them to screen out bad households at a cost. The an ...
household debt and unemployment
... ubiquitous friction in the credit market. Specifically, we introduce heterogeneity in households, so that there are good households that want to work at the late date and bad households that never work. Banks have a screening technology that allows them to screen out bad households at a cost. The an ...
... ubiquitous friction in the credit market. Specifically, we introduce heterogeneity in households, so that there are good households that want to work at the late date and bad households that never work. Banks have a screening technology that allows them to screen out bad households at a cost. The an ...
Financial Ratio Medians-2015.indd
... Ziegler Research calculates financial ratios generally, but not fully, in accordance with the guidelines published by the Commission on Accreditation of Rehabilitation Facilities-Continuing Care Accreditation Commission (CARF-CCAC), a reputable body that accredits CCRCs. If our method for a particu ...
... Ziegler Research calculates financial ratios generally, but not fully, in accordance with the guidelines published by the Commission on Accreditation of Rehabilitation Facilities-Continuing Care Accreditation Commission (CARF-CCAC), a reputable body that accredits CCRCs. If our method for a particu ...
Sovereign Risk, Currency Risk, and Corporate Balance Sheets.
... market sovereigns went from having around 85% of their external debt in FC to having more than half of their external sovereign debt in their own currency. By contrast, even as governments were dramatically changing the way they finance themselves, the private sector continued to borrow from foreign ...
... market sovereigns went from having around 85% of their external debt in FC to having more than half of their external sovereign debt in their own currency. By contrast, even as governments were dramatically changing the way they finance themselves, the private sector continued to borrow from foreign ...
Default, rescheduling and inflation : debt crisis in Spain
... The inflationary tax acted when inflation rate exceeded 5% for a time. This only happened in the twentieth century (graph 3). First, during the First World War the inflation rate almost touched 15%, when the monetary supply yearly rate of growth reached 21 %. Secondly, between the Civil War and 199 ...
... The inflationary tax acted when inflation rate exceeded 5% for a time. This only happened in the twentieth century (graph 3). First, during the First World War the inflation rate almost touched 15%, when the monetary supply yearly rate of growth reached 21 %. Secondly, between the Civil War and 199 ...
Inflating Away the Public Debt? - Centre for Economic Policy Research
... Krause and Moyen (2013) use a DSGE model, making many structural and behavioral assumptions and investigating many links through inflation may affect debt, fiscal surpluses and seignorage. We only assume no arbitrage in the government debt market, and focus exclusively on the debasement of debt. At ...
... Krause and Moyen (2013) use a DSGE model, making many structural and behavioral assumptions and investigating many links through inflation may affect debt, fiscal surpluses and seignorage. We only assume no arbitrage in the government debt market, and focus exclusively on the debasement of debt. At ...
Debt committee report March 2001
... The Committee has considered the issue whether residents should be allowed to hold foreign currency accounts with some modified features, as per the present FE-25 scheme. However, on balance it believes that in the longer run the government should phase out all borrowing in foreign exchange from res ...
... The Committee has considered the issue whether residents should be allowed to hold foreign currency accounts with some modified features, as per the present FE-25 scheme. However, on balance it believes that in the longer run the government should phase out all borrowing in foreign exchange from res ...
What Drives Long-term Capital Flows? A Theoretical and Empirical
... [2000]). This suggests that for a neoclassical model to help us understand variations in borrowing behaviour, some type of imperfection in capital markets is needed. What form should this imperfection take? This paper suggests that a modelled imperfection that allows for the possible complementary r ...
... [2000]). This suggests that for a neoclassical model to help us understand variations in borrowing behaviour, some type of imperfection in capital markets is needed. What form should this imperfection take? This paper suggests that a modelled imperfection that allows for the possible complementary r ...
The Financial Structure of Startup Firms: The Role of
... financed primarily by the entrepreneur’s own resources, followed by external equity such as venture capital, and last by external debt. Insights gleaned from theory suggest that startups would use internal funds first, followed by external resources, with the predictions on the external debt-equity ...
... financed primarily by the entrepreneur’s own resources, followed by external equity such as venture capital, and last by external debt. Insights gleaned from theory suggest that startups would use internal funds first, followed by external resources, with the predictions on the external debt-equity ...