Federal ID: 91-6001537
ISSN: 0022-1090 (Print) | 1756-6916 (Online)
Optimal Ownership and Capital Structure with Agency Conflicts
Yunzhi Hu, Zhaojun Yang, and Nanhui Zhu ♦ We develop a continuous-time model examining agency conflicts among controlling shareholders (managers), minority shareholders, and creditors in corporate investment decisions. The manager’s private benefits encourage over-investment, while their equity stake and debt…