Title: Managers, Owners, and the Pricing of Risky Debt: An Empirical Analysis
Abstract: The Journal of FinanceVolume 49, Issue 2 p. 453-477 Article Managers, Owners, and The Pricing of Risky Debt: An Empirical Analysis ELIZABETH STROCK BAGNANI, ELIZABETH STROCK BAGNANISearch for more papers by this authorNIKOLAOS T. MILONAS, NIKOLAOS T. MILONASSearch for more papers by this authorANTHONY SAUNDERS, ANTHONY SAUNDERSSearch for more papers by this authorNICKOLAOS G. TRAVLOS, NICKOLAOS G. TRAVLOSBagnani is from the Wallace E. Carroll School of Management, Boston College. Milonas is from the School of Management, University of Massachusetts Amherst, University of Athens, and the Athens LBA. Saunders is the John M. Schiff Professor of Finance at the Leonard N. Stern School of Business, New York University. Travlos is from the Wallace E. Carroll School of Management, Boston College, University of Piraeus, and the Athens LBA. We gratefully acknowledge the comments of Yakov Amihud, David Belsley, Mitch Berlin, Cliff Holderness, Kose John, Bruce Lehman, Robyn McLaughlin, Hamid Mehran, Tim Mech, Bob Taggart, Arthur Warga, two anonymous referees, and the editor, René Stulz. We thank the Federal Reserve Bank of Philadelphia for making available data on treasury securities. Milonas acknowledges support from the School of Management of the University of Massachusetts via a Summer Research Grant. Saunders acknowledges the support of a Yamaichi Fellowship. Bagnani and Travlos acknowledge financial support from the Boston College Research Council.Search for more papers by this author ELIZABETH STROCK BAGNANI, ELIZABETH STROCK BAGNANISearch for more papers by this authorNIKOLAOS T. MILONAS, NIKOLAOS T. MILONASSearch for more papers by this authorANTHONY SAUNDERS, ANTHONY SAUNDERSSearch for more papers by this authorNICKOLAOS G. TRAVLOS, NICKOLAOS G. TRAVLOSBagnani is from the Wallace E. Carroll School of Management, Boston College. Milonas is from the School of Management, University of Massachusetts Amherst, University of Athens, and the Athens LBA. Saunders is the John M. Schiff Professor of Finance at the Leonard N. Stern School of Business, New York University. Travlos is from the Wallace E. Carroll School of Management, Boston College, University of Piraeus, and the Athens LBA. We gratefully acknowledge the comments of Yakov Amihud, David Belsley, Mitch Berlin, Cliff Holderness, Kose John, Bruce Lehman, Robyn McLaughlin, Hamid Mehran, Tim Mech, Bob Taggart, Arthur Warga, two anonymous referees, and the editor, René Stulz. We thank the Federal Reserve Bank of Philadelphia for making available data on treasury securities. Milonas acknowledges support from the School of Management of the University of Massachusetts via a Summer Research Grant. Saunders acknowledges the support of a Yamaichi Fellowship. Bagnani and Travlos acknowledge financial support from the Boston College Research Council.Search for more papers by this author First published: June 1994 https://doi.org/10.1111/j.1540-6261.1994.tb05148.xCitations: 46 Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onEmailFacebookTwitterLinkedInRedditWechat ABSTRACT This article examines managerial ownership structure and return premia on corporate bonds. It is argued that when managerial ownership is low, an increase in managerial ownership increases management's incentives to increase stockholder wealth at the expense of bondholder wealth. When ownership increases more, however, it is argued that management becomes more risk averse, with incentives more closely aligned with bondholders. This study finds a positive relation between managerial ownership and bond return premia in the low to medium (5 to 25 percent) ownership range. There is also weak evidence for a nonpositive relation in the large (over 25 percent) ownership range. REFERENCES Agrawal, A., and G. N. Mandelker, 1987, Managerial incentives and corporate investment and financing decisions, The Journal of Finance 42, 823–837. Amihud, Y., and B. Lev, 1981, Risk reduction as a managerial motive for conglomerate mergers, Bell Journal of Economics 12, 605–617. Amihud, Y., and N. G. 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Citing Literature Volume49, Issue2June 1994Pages 453-477 ReferencesRelatedInformation
Publication Year: 1994
Publication Date: 1994-06-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 18
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