Abstract

http://ssrn.com/abstract=236383
 
 

Citations



 


 



The Private Placement of Debt and Outside Equity as an Information Revelation Mechanism


Michel A. Habib


University of Zurich; Swiss Finance Institute

D. Bruce Johnsen


George Mason University - School of Law; PERC - Property and Environment Research Center


Review of Financial Studies, Vol. 13, Issue 4

Abstract:     
We view debt and outside equity as serving to elicit credible information from different specialists about the value of an enterprise in its various uses. The equity valuation specialist provides a price forecast for equity that reveals information about the value for the enterprise in its primary use. The debt valuation specialist provides a price forecast for debt that reveals information about the value of the enterprise in its alternative use. The prices forecast by the valuation specialists credibly reveal their private information because they are required to buy the associated claims at the forecast prices, thereby bonding their valuations.

JEL Classification: G31, G32

Accepted Paper Series





Not Available For Download

Date posted: August 22, 2000  

Suggested Citation

Habib, Michel A. and Johnsen, D. Bruce, The Private Placement of Debt and Outside Equity as an Information Revelation Mechanism. Review of Financial Studies, Vol. 13, Issue 4 . Available at SSRN: http://ssrn.com/abstract=236383

Contact Information

Michel A. Habib (Contact Author)
University of Zurich ( email )
Plattenstrasse 14
Zurich, 8032
Switzerland
41-44-634-2507 (Phone)
41-44-634-4903 (Fax)
HOME PAGE: http://www.isb.uzh.ch/institut/profs/mhabib.htm
Swiss Finance Institute ( email )
c/o University of Geneve
40, Bd du Pont-d'Arve
1211 Geneva, CH-6900
Switzerland

D. Bruce Johnsen
George Mason University - School of Law ( email )
3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-8066 (Phone)
703-993-8088 (Fax)
PERC - Property and Environment Research Center
2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

Feedback to SSRN


Paper statistics
Abstract Views: 1,106

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.344 seconds