Optimal capital structure with an equity-for-guarantee swap

Zhaojun Yang, Hai Zhang

Research output: Contribution to journalArticle

16 Citations (Scopus)

Abstract

This paper finds that a newly created equity-for-guarantee swap can significantly increase a firm’s value. If the firm earns more/less in a recession/boom market, the guarantee cost will decrease. The greater the business risk is, the more the guarantee cost will decrease and the higher the leverage ratio will be.
LanguageEnglish
Pages355-359
Number of pages5
JournalEconomic Letters
Volume118
Issue number2
Early online date5 Dec 2012
DOIs
Publication statusPublished - 28 Feb 2013
Externally publishedYes

Fingerprint

Optimal capital structure
Guarantee
Equity
Swaps
Costs
Business risk
Recession
Leverage ratio

Keywords

  • equity-for-guarantee swap
  • capital structure
  • guarantee cost

Cite this

Yang, Zhaojun ; Zhang, Hai. / Optimal capital structure with an equity-for-guarantee swap. In: Economic Letters. 2013 ; Vol. 118, No. 2. pp. 355-359.
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Optimal capital structure with an equity-for-guarantee swap. / Yang, Zhaojun; Zhang, Hai.

In: Economic Letters, Vol. 118, No. 2, 28.02.2013, p. 355-359.

Research output: Contribution to journalArticle

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