Debt and managerial rents in a real-options model of the firm

• 成果类型: Article
• 署名作者: Lambrecht, Bart M.; Myers, Stewart C.
• 署名单位: Lancaster University; Massachusetts Institute of Technology (MIT)
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2007.07.007
• 发表日期: 2008
• 页码: 209-231
• 关键词: investment policy; Financing policy; debt; AGENCY; governance

摘要

We present a theory of capital investment and debt and equity financing in a real-options model of a public corporation. The theory assumes that managers maximize the present value of their future compensation (managerial rents), subject to constraints imposed by outside shareholders' property rights to the firm's assets. Absent bankruptcy costs, managers follow an optimal debt policy that generates efficient investment and disinvestment. We show how bankruptcy Costs can distort both investment and disinvestment. We also show how managers' personal wealth constraints can lead to delayed investment and increased reliance on debt financing. Changes in cash flow can cause changes in investment by tightening or loosening the wealth constraints. Firms with weaker investor protection adopt higher debt levels. (C) 2008 Elsevier B.V. All rights reserved.