Title: Firm's Risk-shifting Behavior and Its Selection of Debt Contracts
Abstract: Due to the payoff asymmetry between firm's owner and its lender,firm has the incentive of risk-shifting.This paper shows,through a proper design of firm's debt structure of private debt and public debt,this problem may be reduced.Hence,a firm's mixed debt capacity is larger than that of its private debt,and its private debt capacity larger than its public debt capacity,in a common sense.
Publication Year: 2001
Publication Date: 2001-01-01
Language: en
Type: article
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