Heterogeneous Beliefs, Moral Hazard and Capital Structure

2003 ◽  
Vol 55 (2) ◽  
pp. 136-160 ◽  
Author(s):  
Jochen Bigus
Keyword(s):  
Moral Hazard ◽  
Capital Structure ◽  
Heterogeneous Beliefs

Capital Structure and Security Issuance Under Heterogeneous Beliefs

2010 ◽  
Author(s):  
Thomas J. Chemmanur ◽  
Jean-Sebastien Michel ◽  
Debarshi K. Nandy ◽  
An Yan
Keyword(s):  
Capital Structure ◽  
Heterogeneous Beliefs ◽  
Security Issuance

scholarly journals Moral Hazard and Capital Structure Dynamics

2002 ◽  
Author(s):  
Mathias Dewatripont ◽  
Patrick Legros ◽  
Steven A. Matthews
Keyword(s):  
Moral Hazard ◽  
Capital Structure ◽  
Structure Dynamics

Optimal capital structure with moral hazard

2017 ◽  
Vol 48 ◽  
pp. 326-338 ◽  
Author(s):  
Congming Mu ◽  
Anxing Wang ◽  
Jinqiang Yang
Keyword(s):  
Moral Hazard ◽  
Capital Structure ◽  
Optimal Capital Structure ◽  
Optimal Capital

CORPORATE FINANCING UNDER HETEROGENEOUS BELIEFS

2017 ◽  
Vol 12 (04) ◽  
pp. 1750019
Author(s):  
WEINING NIU
Keyword(s):  
Numerical Simulation ◽  
Capital Structure ◽  
Stock Price ◽  
Equity Capital ◽  
Heterogeneous Beliefs ◽  
Price Effect ◽  
Corporate Financing ◽  
Optimal Capital Structure ◽  
Price Effects ◽  
Optimal Capital

The paper models firm’s optimal capital structure and stock price effects from the perspective of expectation equilibrium when manager and outside investors have heterogeneous prior and posterior beliefs on firm’s future cash flow. I find that the more optimistic (pessimistic) of outside investors and the more dispersion of beliefs between manager and outside investors, the higher (lower) the issuing price of stocks, the higher (lower) the issuing amount, hence the higher (lower) the proportion of equity capital in capital structure, and a higher positive (negative) stock price effect after security issuance. The numerical simulation also verifies the findings to some extent.

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