Designing securities for scrutiny
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- dc.contributor.author Daley, Brendan
- dc.contributor.author Green, Brett
- dc.contributor.author Vanasco, Victoria
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2024-11-14T10:10:14Z
- dc.date.available 2024-11-14T10:10:14Z
- dc.date.issued 2016-09-01
- dc.date.modified 2024-11-14T10:08:25Z
- dc.description.abstract We investigate the effect of scrutiny (e.g., credit ratings, analyst reports, or mandatory disclosures) on the security design problem of a privately informed issuer. We show that scrutiny has important implications for both the form of security designed and the amount of inefficient retention of cash flows. The model predicts that issuers will design informationally sensitive securities (i.e., levered equity) when scrutiny is sufficiently intense. Otherwise, issuers opt for a standard debt contract. Scrutiny increases efficiency by decreasing issuers' reliance on retention to signal quality, and perhaps counterintuitively, decrease price informativeness.
- dc.format.mimetype application/pdf*
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1818
- dc.identifier.citation R&R at the Review of Financial Studies
- dc.identifier.uri http://hdl.handle.net/10230/68681
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1818
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword
- dc.subject.keyword Macroeconomics and International Economics
- dc.title Designing securities for scrutiny
- dc.title.alternative
- dc.type info:eu-repo/semantics/workingPaper