Risky debt, investment incentives, and reputation in a sequential equilibrium

Article Abstract:

A model of the agency relationship that corporate insiders have with corporate debt bondholders is developed, which when analyzed under conditions of sequential equilibrium, accounts for both the endogenous creation of corporate reputation and the tendency of agencies to under invest. When companies expect favorable ratings for bonds floated to raise capital, they are less likely to under invest. The model is applied to various time periods and time series, and the discussion of the model notes that time factors are important to economists and researchers, since agency costs are exaggerated by single period analyses.

Economic aspects, Investments, Risk management, Capital investments, Valuation, Debt financing (Corporations), Debt financing, Assets (Accounting)

---

Equilibrium block trading and asymmetric information

Article Abstract:

This paper investigates the existence of equilibria with information-based block trading in a multiperiod market when no investor is constrained to block trade. Attention is restricted to equilibria in which a strategic uninformed institution (i.e., one which is forced to rebalance its portfolio but is free to choose an optimal rebalancing strategy) is willing to trade a block rather than "break up" the block into a series of smaller trades. Examples of such equilibria are found and analyzed. (Reprinted by permission of the publisher.)

Stocks, Investors, Block trading

---

Similar abstracts:

• Abstracts: A decent investment with decent returns. Who'd be a trustee? Ethical obligations
• Abstracts: Interday variations in volume, variance and participation of large speculators. An examination of herd behavior in equity markets: An international perspective
• Abstracts: Self-raising investment. Inter Link Foods is on a roll. Greggs
• Abstracts: Over there and over-indulgent. Questions medicine can't answer. Stream of consciousness
• Abstracts: Redundant governance structures: an analysis of structural and relational embeddedness in the steel and semiconductor industries

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.