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dc.contributor.authorLambrecht, Barten
dc.contributor.authorMyers, SCen
dc.date.accessioned2017-04-26T08:21:05Z
dc.date.available2017-04-26T08:21:05Z
dc.date.issued2017-11en
dc.identifier.issn0893-9454
dc.identifier.urihttps://www.repository.cam.ac.uk/handle/1810/263815
dc.description.abstractWe develop a dynamic agency model of a public corporation. Managers underinvest be- cause of risk aversion. They smooth rents and payout. They do not exploit interest tax shields fully. The interactions of investment, debt and payout decisions can change dras- tically depending on managers’ preferences. Managers with power utility set investment, debt and payout proportional to the firm’s net worth, generating a constant (possibly negative) net debt ratio. With exponential utility, investment decisions are separated from decisions about debt and payout. More profitable firms become cash cows and less profitable firms accumulate debt, as in a pecking order model.
dc.description.sponsorshipLambrecht gratefully acknowledges financial support from the Cambridge Endowment for Research in Finance (CERF).
dc.languageengen
dc.language.isoenen
dc.publisherOxford University Press
dc.subjectpayouten
dc.subjectinvestmenten
dc.subjectfinancing policyen
dc.subjectagencyen
dc.titleThe dynamics of investment, payout and debten
dc.typeArticle
prism.endingPage3800
prism.issueIdentifier11en
prism.publicationDate2017en
prism.publicationNameThe Review of Financial Studiesen
prism.startingPage3759
prism.volume30en
dc.identifier.doi10.17863/CAM.9187
dcterms.dateAccepted2017-01-31en
rioxxterms.versionofrecord10.1093/rfs/hhx081en
rioxxterms.versionAMen
rioxxterms.licenseref.urihttp://www.rioxx.net/licenses/all-rights-reserveden
rioxxterms.licenseref.startdate2017-11en
dc.identifier.eissn1465-7368
rioxxterms.typeJournal Article/Reviewen
cam.issuedOnline2017-07-19en
rioxxterms.freetoread.startdate2019-07-19


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