haku: @indexterm debt financing / yhteensä: 179
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| Tekijä: | Schnabel, J. A. |
| Otsikko: | An agency-theoretic perspective on participation clauses in loan contracts. |
| Lehti: | Journal of Business Finance and Accounting
1993 : JAN, VOL. 20:1, p. 133-142 |
| Asiasana: | AGENCY THEORY DEBT FINANCING LOANS CONTRACTS |
| Kieli: | eng |
| Tiivistelmä: | This paper discusses the role of participation clauses in loan contracts as a way of controlling a specific type of agency problem associated with debt financing, Myers' underinvestment problem. It is shown that the inclusion of a participation clause can serve to control the underinvestment problem. Author has stressed that, if the participation clause is structured so as to ameliorate the underinvestment problem without affecting the amount of debt financing obtained, the stockholders will be motivated to incorporate the participation clause because this would increase the market value of their common stock. |
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