scholarly journals Family Firms and the Agency Cost of Debt: The Role of Soft Information during a Crisis

2012 ◽  
Author(s):  
Leandro D'Aurizio ◽  
Tommaso Oliviero ◽  
Livio Romano
Keyword(s):  
Family Firms ◽  
Agency Cost ◽  
Soft Information ◽  
Cost Of Debt ◽  
Agency Cost Of Debt

scholarly journals The role of regulatory authority in affecting firm performance

2014 ◽  
Vol 11 (4) ◽  
pp. 539-548
Author(s):  
Kashif Rashid ◽  
Sardar M. N. Islam ◽  
Siti Nuryanah
Keyword(s):  
Regulatory Authority ◽  
Agency Cost ◽  
Free Cash Flow ◽  
Cost Of Debt ◽  
Financial Health ◽  
Information Efficiency ◽  
Regulatory Authorities ◽  
Leadership Structure ◽  
Agency Cost Of Debt

This paper examines the role of regulatory authority in affecting the performance or value of a firm. The study has used panel data of 120 companies for the years 2000 to 2003 for developing (Malaysia) and developed (Australia) financial markets. The findings of the study suggest that there is a positive relationship between the regulatory authority efficiency and the financial health of a firm. The dual leadership structure results in the value creation for shareholders in these markets as the regulatory authorities force independent CEO to defend the rights of shareholders. On the contrary, the external regime in these markets cannot manage the agency cost of debt as the free cash flow is not utilised efficiently to resolve the principal (shareholders) and agent (managers) conflicts in these markets. Finally, the effectiveness of regulatory authorities results in higher information efficiency and optimal utilisation of assets in the market leading to defending the rights of shareholders.

ON THE PRICING OF AN ISLAMIC CONVERTIBLE MORTGAGE FOR INFRASTRUCTURE PROJECT FINANCING

2002 ◽  
Vol 05 (07) ◽  
pp. 701-728 ◽  
Author(s):  
MUHAMMED-SHAHID EBRAHIM ◽  
TARIQULLAH KHAN
Keyword(s):  
Agency Cost ◽  
Rate Of Return ◽  
Cost Of Debt ◽  
Project Financing ◽  
Exogenous Variables ◽  
Muslim Countries ◽  
Fractional Ownership ◽  
Infrastructure Project ◽  
Agency Cost Of Debt ◽  
The Impact

This paper models a default-free convertible facility to finance infrastructure projects in emerging Muslim countries. The mortgage is designed as a combination of an Islamic credit facility (allowing the collateralization of debt by the assets of the firm as espoused in Scott[32], Stulz and Johnson[36]) and inclusion of real warrants (as espoused in Green[12], Haugen and Senbet[15]) to mitigate the agency cost of debt discussed in Myers[27]. Numerical simulation is employed to endogenously solve for the rate of return, tenure and fractional ownership to be conveyed to financier upon conversion of the facility without resorting to any interest based (ribawi) index. Finally, sensitivity analysis is conducted to study the impact of exogenous variables and to reconcile with the existing mainstream finance literature such as Barclay and Smith[3], Stohs and Mauer [35] and Guedes and Opler [13].

Measuring the Agency Cost of Debt

1992 ◽  
Vol 47 (5) ◽  
pp. 1887-1904 ◽  
Author(s):  
ANTONIO S. MELLO ◽  
JOHN E. PARSONS
Keyword(s):  
Agency Cost ◽  
Cost Of Debt ◽  
Agency Cost Of Debt

scholarly journals Determinants of Small Business Owner Loan

2019 ◽  
Vol 3 (2) ◽  
pp. 8
Author(s):  
Jiameng Ma
Keyword(s):  
Small Business ◽  
Small Businesses ◽  
The United States ◽  
Agency Cost ◽  
Cost Of Debt ◽  
Business Owner ◽  
Small Business Owner ◽  
Small Business Finance ◽  
United States Economy ◽  
Agency Cost Of Debt

Shareholders and debtholders have diverging objectives. Shareholders are residual claimants whereas debtholders are fxed claimants to frm’s assets. In leveraged frms, shareholders may increase the value of their claims at the expense of debtholders. The presence of shareholders being debtholders is a smart interest alignment, providing a solution to shareholder-debtholder conflicts. This paper focuses on small businesses, which play an important role in the United States economy but are generally neglected by academia. Utilizing National Survey of Small Business Finance (NSSBF) data, this paper shows that frms with higher agency cost of debt are more likely to issue owner loan. The incidence of small business owner loan is positively associated with external lending diffculty, low shareholder agency cost and frm valuation diffculty.

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