search query: @indexterm FINANCIAL INTERMEDIARIES / total: 113
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Author: | Boyd, J. Smith, B. |
Title: | The use of debt and equity in optimal financial contracts |
Journal: | Journal of Financial Intermediation
1999 : OCT, VOL. 8:4, p. 270-316 |
Index terms: | FINANCIAL INTERMEDIARIES DEBT EQUITY CAPITAL |
Language: | eng |
Abstract: | The authors consider risk-neutral firms that must obtain external finance. They have access to two kinds of stochastic investment opportunities. For one, return realizations are costlessly observed by all agents. For the other, return realizations are costlessly observed only by the investing firm. The authors examine the optimal allocation of investment between the two projects and the optimal contract used to finance it. |
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