 Capital Structure and Corporate Financial PolicyKevin Dowd
Chapter 3 in Competition and Finance, 1996, pp 76-113 from Palgrave Macmillan Abstract: Abstract Chapter 2 looked at the basics of contract theory in a setting with two classes of agent. This chapter builds upon that discussion by extending the treatment of contracting theory to encompass contracts involving three or more types of agent. Instead of there being just equity-holders and a single class of undifferentiated debtholders, we now consider cases where there might be equity-holders and two classes of debt-holder (i.e., one with a senior repayment claim on the firm and one with a junior claim), or where the manager of a debt-issuing firm is no longer sole owner, and so we have two types of equity-holder — the inside holder (i.e., the manager) and the outside equity-holder (i.e., the other equity-holder(s)) — as well as the debt-holder. Indeed, we often have situations where there is inside and outside equity as well as junior and senior debt, and we frequently get cases where the firm issues other types of financial instrument as well (e.g., subordinated debt). Keywords: Corporate Governance; Capital Structure; Agency Cost; Dividend Policy; Debt Contract (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-24856-8_3 Ordering information: This item can be ordered from DOI: 10.1007/978-1-349-24856-8_3 Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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