WP 2010-14 Capital Structure under Heterogeneous Beliefs

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Published in 2014 in Review of Finance, Volume 18, Issue 5.

AUTHORS: Hae Won (Henny) Jung and Ajay Subramanian

ABSTRACT. We develop a dynamic structural model to examine the effects of differing beliefs of the manager and outsider investors regarding the profitability of a firm's projects and manager-shareholder agency conflicts on its… more »