Wanzenried, Gabrielle (November 2002). Signaling with Capital Structure Revisited (Diskussionsschriften 02-14). Bern: Universität Bern Volkswirtschaftliches Institut
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We consider a signaling model with a good and a bad type of Þrm. The market does à priori not know the firms type. The firms, which are run by equally qualiÞed managers, can use their debt level to signal their true value to the market. In addition to debt, the manager chooses his effort level, which directly affects the firms product market returns. The effort choice interacts with the signaling mechanism of debt issue and affects the equilibrium debt level. As a result, it is not always possible to derive the type of Þrm from its capital structure.
Item Type: |
Working Paper |
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Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
Series: |
Diskussionsschriften |
Publisher: |
Universität Bern Volkswirtschaftliches Institut |
Language: |
English |
Submitter: |
Aline Lehnherr |
Date Deposited: |
11 Jun 2020 16:32 |
Last Modified: |
06 Aug 2020 14:18 |
JEL Classification: |
G32, D82, J33 |
BORIS DOI: |
10.7892/boris.143994 |
URI: |
https://boris.unibe.ch/id/eprint/143994 |
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