search query: @indexterm capital structure of companies / total: 353
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| Author: | Mazzoli, M. |
| Title: | Investments, financial structure and imperfect financial markets: An intertemporal discrete-time framework |
| Journal: | European Journal of Finance
2005 : JUN, VOL 11:3, p. 247-258 |
| Index terms: | Financial markets Financing Policy Investments Capital structure of companies |
| Language: | eng |
| Abstract: | This paper deals with the problem of simultaneity btw. the firm's investments and financial structure in the context of dynamic optimization where the process of information spreading associating the profitability of the firm to its share price only takes part gradually, due to market imperfections and diverging incentives btw. managers and shareholders. Particularly, the former are assumed to hold the control of the firm, deciding on the allocation of its cash-flow. This creates a link btw. cash-flow and rate of discount of profits, generating a 'financial channel of transmission' of the real shocks. |
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