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CEO traits, dynamic compensation and capital structure.
- Source :
- PLoS ONE; 2/13/2019, Vol. 14 Issue 2, p1-11, 11p
- Publication Year :
- 2019
-
Abstract
- This paper studies the impact of managerial traits, i.e. optimism, confidence and risk aversion, on capital structure using a principle-agent framework. We discover that optimistic manager perceives equity as more undervalued than debt, while, confident manager perceives debt as more undervalued than equity. We also find that there exists the level of risk aversion eliminating the impact of optimism and confidence on the leverage. Furthermore, in contrast to rational manager, the optimistic/confident manger has higher level of effort. And then, the increasing in risk aversion reduces the level of effort. Our results are in line with some empirical findings. [ABSTRACT FROM AUTHOR]
- Subjects :
- CAPITAL structure
GROWTH rate
BANKRUPTCY
FINANCIAL management
RISK aversion
Subjects
Details
- Language :
- English
- ISSN :
- 19326203
- Volume :
- 14
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- PLoS ONE
- Publication Type :
- Academic Journal
- Accession number :
- 134679624
- Full Text :
- https://doi.org/10.1371/journal.pone.0211422