Leverage

Working Paper

Caught between Scylla and Charybdis? Regulating Bank Leverage When There is Rent Seeking and Risk Shifting

We develop a theory of optimal bank leverage in which the benefit of debt in inducing
loan monitoring is balanced against the benefit of equity in attenuating risk-shifting.
However, faced with socially-costly correlated bank failures...Read more

Viral Acharya
Anjan Thakor
01 September 2015

Borrow Cheap, Buy High? The Determinants of Leverage and Pricing in Buyouts

Private equity funds pay particular attention to capital structure when executing leveraged buyouts, creating an interesting setting for examining capital structure theories. Using a large, detailed, international sample of buyouts from 1980-2008...Read more

Ulf Axelson
Tim Jenkinson
Per Strömberg
Michael Weisbach
01 March 2012

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