The 268th Wenlan Financial Forum

Abstract:

We develop a dynamic tradeoff model that incorporates both controlling-minority shareholders conflict and shareholders-debtholders conflict to examine the relationship among agency conflicts, expansion investment, capital structure, and debt renegotiation. We show that balancing the two conflicts can eliminate agency conflicts in effect and simultaneously make the firm achieve the first-best expansion decision. Endowing the controlling shareholder with appropriate bargaining power in debt renegotiation can realize zero agency costs and make the firm's capital structure maximize the firm value.

Speaker Introduction：

Zhaojun Yang is a researcher, associate professor, doctoral supervisor of the Department of Finance, Southern University of Science and Technology. He has published more than 180 papers in academic journals at home and abroad. His research interests include financial engineering, corporate finance theory and asset pricing.