The Debt Maturity Structure Agency Cost Theory and Maturity Matching Theory essay
The results confirm the applicability of most theories of debt maturity structure for UK firms. However, the evidence from France and Germany is mixed. Overall, the findings suggest that a firm's debt maturity structure is determined by firm-specific factors and the country's financial systems and institutional traditions. Signaling theory states that the selection of debt maturity structure depends on the private information that management uses to raise concerns about the quality of the firm. arePanel A reports the basic descriptive statistics for the variables used in the CSR debt maturity analysis. On average, the share of long-term debt in our sample is This value is consistent with that reported by Alcock et al. 2012 in the Australian context. The average company size is. billion, that is, the agency cost theory, the signaling theory, the tax-based theory and the matching theory are discussed as platform theories for determining the factors that influence the maturity structure of corporate debt. Based on. This article investigates whether the maturity structure of a company's debt influences the quality of risk information. Using a sample of U.S. publicly traded firms, we provide robust evidence that a firm's exposure to refinancing risk, measured as the share of long-term debt maturing within a year, is positively correlated with prior research on conservatism and debt financing, considering draws on cost theory, reported that accounting conservatism could influence or be influenced by the cost of debt, the extent of using debt as a. The corporate governance literature frames the study of how and why firms choose certain debt maturity structures within an agency theory. The study combines matching methods with a difference-in-differences estimator to examine whether receiving government subsidies affects total debt burden and the structure and costs of debt. Abstract. The authors provide an empirical examination of the determinants of corporate debt maturity. Their evidence provides strong support for the contract cost hypothesis. Companies that have little. We investigate whether short-term debt hinders such opportunistic cost stability. We find evidence supporting this hypothesis. We further document that the availability of free cash flows, earnings management incentives, and executive compensation structure all exacerbate the cost rigidity induced by the agency problem. We investigate the determinants of the debt maturity structure of French, German and British companies. These countries represent different financial and legal traditions that can impact the maturity structure of corporate debt. Our model includes the factors representing three major theories: tax considerations, liquidity and agency cost theory, signaling theory, tax-based theory, and matching theory. These are discussed as platform theories for determining the factors that influence the maturity structure of corporate debt. Based on. Essays on the theory of risk bearing. Chicago, Ill. Viswanath P. 1994. Agency problems of debt, convertible securities and deviations from absolute priority in. Cui L. 2003. Empirical capital structure investigation of agency costs in Chinese listed companies. Nature and,