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Refinancing Risk and Disclosure of Corporate Investment
| Content Provider | Scilit |
|---|---|
| Author | Paul, Tanya Zhou, Frank |
| Copyright Year | 2018 |
| Description | Journal: SSRN Electronic Journal This study investigates the relation between the refinancing risk, an important form of risk stemming from debt financing, and firms' decisions to issue capital expenditure forecasts. We find that an increase in refinancing risk is associated with both a lower probability of disclosing and a lower frequency of capital expenditure forecasts. Cross-sectional tests show that firms more exposed to refinancing risk and less able to mitigate this risk are more likely to reduce capital expenditure forecasts, following an increase in refinancing risk. Our results suggest that capital structure can influence firm information environment through managers' disclosure incentives to withhold bad news. This is contrary to common belief that leverage has limited effects on firm disclosure behavior, as debtholders' payoff is less sensitive information and lenders can privately communicate with borrowers. |
| Related Links | http://scholarspace.manoa.hawaii.edu/bitstream/10125/59352/1/HARC_2019_paper_197.pdf https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=3292659 |
| ISSN | 10914358 |
| e-ISSN | 15565068 |
| DOI | 10.2139/ssrn.3292659 |
| Journal | SSRN Electronic Journal |
| Language | English |
| Publisher | Elsevier BV |
| Publisher Date | 2018-11-27 |
| Access Restriction | Open |
| Subject Keyword | Journal: SSRN Electronic Journal Refinancing Risk Capital Expenditure Forecasts Agency Cost of Debt |
| Content Type | Text |
| Resource Type | Article |
| Subject | Public Health, Environmental and Occupational Health Psychiatry and Mental Health |
