haku: @author Nachman, D. C. / yhteensä: 2
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| Tekijä: | Nachman, D. C. Noe, T. H. |
| Otsikko: | Optimal design of securities under asymmetric information. |
| Lehti: | Review of Financial Studies
1994 : SPRING, VOL. 7:1, p. 1-44 |
| Asiasana: | SECURITIES FINANCE INVESTMENT COMPANIES |
| Kieli: | eng |
| Tiivistelmä: | A firm must decide what security to sell to raise external capital to finance a profitable investment opportunity. There is ex ante asymmetry of information regarding the probability distribution of cash flow generated by the investment. In this setting, necessary and sufficient conditions are derived for a security to be optimal, that is, for pooling at this security to be an equilibrium outcome. Using these conditions it is shown that the debt contract is optimal if and only if cash flows are ordered by conditional stochastic dominance. |
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