Risk Aversion, Managerial Reputation and Debt-Equity Conflict

Posted: 19 Dec 2005 Last revised: 21 May 2017

Yuri Khoroshilov

University of Ottawa, Telfer School of Management

Anna Dodonova

University of Ottawa - Telfer School of Management

Abstract

This paper investigates debt-equity conflict in a firm, shows that shareholders can solve it by delegating project choice decisions to a risk-averse manager, and argues that managers' desire to build reputation may allow to solve this conflict even in firms with risk-neutral managers.

Suggested Citation

Khoroshilov, Yuri and Dodonova, Anna, Risk Aversion, Managerial Reputation and Debt-Equity Conflict. Finance Letters, February 2006. Available at SSRN: https://ssrn.com/abstract=870448

Yuri Khoroshilov

University of Ottawa, Telfer School of Management ( email )

55 E. Laurier
Ottawa, Ontario K1N 6N5
Canada
613-562-5800, ext. 4768 (Phone)

Anna Dodonova (Contact Author)

University of Ottawa - Telfer School of Management ( email )

136 Jean-Jacques Lussier Street
Ottawa, Ontario K1N 6N5
Canada
(613) 562 5800 + 4912 (Phone)

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