Agency costs, risk management, and capital structure

• 成果类型: Article
• 署名作者: Leland, HE
• 署名单位: University of California System; University of California Berkeley
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/0022-1082.00051
• 发表日期: 1998
• 页码: 1213-1243
• 关键词: Debt Maturity structure; corporate-debt; valuation; determinants; PROVISIONS; securities; INVESTMENT; FRAMEWORK; options; POLICY

摘要

The joint determination of capital structure and investment risk is examined. Optimal capital structure reflects both the tax advantages of debt less default costs (Modigliani and Miller (1958, 1963)), and the agency costs resulting from asset substitution (Jensen and Meekling (1976)). Agency costs restrict leverage and debt maturity and increase yield spreads, but their importance is small for the range of environments considered. Risk management is also examined. Hedging permits greater leverage. Even when a firm cannot precommit to hedging, it will still do so. Surprisingly, hedging benefits often are greater when agency costs are low.