Numerical Illustrations of Key Financing Policy Results under the Debt–Equity Security Space

Vipin K Agrawal and Ramesh K S Rao

Chapter 10 in Corporate Policies in a World with Information Asymmetry, 2015, pp 87-100 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The following sections are included:Illustrating Results for Proposition 9Hazard Rate IA is Negative (The Most Concave Security Exists and It is Debt)Graph of $NPV_h^C (F)$ versus A for pooled contractsVerification of resultHazard Rate IA is Zero (Indifference between Debt and Equity)Hazard Rate IA is Positive (Most Concave Security Exists and It is Equity)Hazard Rate IA Sign Changes (Most Concave Security does Not Exist and Security Issued Depends on Financing Needs)Illustrating Results for Proposition 10aHazard Rate IA is First Positive then Negative (Firm Issues Debt if M is High and Equity if It is Low)Hazard Rate IA is First Negative then Positive (Firm Issues Debt if M is Low and Debt-Equity if It is High)Illustrating Results for Proposition 10cDownside IA and Equity IssuanceRisk and Equity Issuance

Keywords: Information Asymmetry; Financing Decisions; Capital Structure; Dividend Policy (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789814551311_0010 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789814551311_0010 (text/html)
Ebook Access is available upon purchase.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:wschap:9789814551311_0010

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().