Distress-Triggered Liabilities and the Agency Costs of Debt

2017 ◽  
Author(s):  
Richard Squire
Keyword(s):  
Agency Costs ◽  
Agency Costs Of Debt

ON DEFINING THE AGENCY COSTS OF DEBT

1986 ◽  
Vol 10 (2) ◽  
pp. 3-26
Author(s):  
Raymond F. Gorman
Keyword(s):  
Agency Costs ◽  
Agency Costs Of Debt

Kelly Solar

2017 ◽  
pp. 1-3
Author(s):  
Samuel E. Bodily ◽  
Marc L. Lipson ◽  
Kenneth C. Lichtendahl
Keyword(s):  
Firm Value ◽  
Agency Costs ◽  
Debt Overhang ◽  
Start Up ◽  
Outstanding Debt ◽  
Agency Costs Of Debt

A small start-up company must make additional investments to maximize its firm value. But the company owner will not make this investment unless she can renegotiate outstanding debt claims. Solving this “debt overhang” problem through negotiation is the focus of the case. In this context, students are exposed to a variety of issues: the nature of financial claims, bargaining and negotiation fundamentals, and agency costs of debt.

Event Risk Bond Covenants, Agency Costs of Debt and Equity, and Stockholder Wealth

1994 ◽  
Vol 23 (4) ◽  
pp. 28 ◽  
Author(s):  
Sung C. Bae ◽  
Daniel P. Klein ◽  
Raj Padmaraj
Keyword(s):  
Agency Costs ◽  
Event Risk ◽  
Agency Costs Of Debt

Bank-appointed directors and idiosyncratic volatility: evidence from India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nemiraja Jadiyappa ◽  
Anto Joseph ◽  
Garima Sisodia
Keyword(s):  
Stock Returns ◽  
Agency Costs ◽  
Negative Relationship ◽  
Least Square ◽  
Idiosyncratic Volatility ◽  
Active Monitoring ◽  
Content Type ◽  
Investment Projects ◽  
The Impact ◽  
Agency Costs Of Debt

PurposeThe purpose of this paper is to empirically examine the impact of the bank-appointed directors on the agency costs of debt by using the idiosyncratic risk of stock returns as a measure of agency costs of debt.Design/methodology/approachWe use multivariate panel regression, event study and finally, propensity score matching approaches to test our hypothesis. The robustness of the results is tested for possible endogeneity issues by employing instrumental variable two-stage least square (IV-2SLS) technique.FindingsConsistent with the efficient monitoring hypothesis, we find a negative relationship between the presence of the bank-appointed director and the idiosyncratic volatility of stock returns among Indian firms. This implies that such firms take up less risky investment projects.Originality/valueWe contribute to the literature from two aspects. First, to the best of our knowledge, this is the first study that examines the monitoring efficiency of creditors' governance. Hitherto, such examinations are done from the shareholders' perspective. Second, we examine the role of the bank-appointed directors on the board of non-financial firms in an emerging world context and find, contrary to the existing evidence in the US context, active monitoring role played by such directors.

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