A Cautionary Note on Niu and Zeng (2018)
6 Pages Posted: 22 Jan 2020
Date Written: November 8, 2019
We revisit the article by Niu and Zeng (FRL, 2018) on “Corporate financing with loss aversion and disagreement”. We find two problematic points in the mathematical derivation of their fundamental results and suggest ways to remedy these problems.
Keywords: Corporate Finance, Capital Structure, Loss Aversion, Prospect Theory
JEL Classification: C61, G32
Suggested Citation: Suggested Citation