NBER WORKING PAPER SERIES RISKS OF AN ECONOMY
... So far, we have discussed how to calculate the value of debt, guarantees, and equity using the CCA approach. We now turn to how to measure the risk exposures. The values of the contingent claims on the CCA balance sheets contain embedded implicit options which can be used to obtain certain risk meas ...
... So far, we have discussed how to calculate the value of debt, guarantees, and equity using the CCA approach. We now turn to how to measure the risk exposures. The values of the contingent claims on the CCA balance sheets contain embedded implicit options which can be used to obtain certain risk meas ...
Credit: The Promise to Pay
... Indicates how much credit costs on a yearly basis. Grace Period Time period during which no finance charges will be added to an account. Cash Advance Borrow money on a credit card. ...
... Indicates how much credit costs on a yearly basis. Grace Period Time period during which no finance charges will be added to an account. Cash Advance Borrow money on a credit card. ...
Government Deficits and Debt - The Office of the Auditor General in
... A series of PowerPoint presentations were developed, including: the Province of Manitoba’s fiscal position, a comparison of deficits and debt among the provinces, and national and international research and developments on government debt. Two roundtables were organized and held in Brandon and W ...
... A series of PowerPoint presentations were developed, including: the Province of Manitoba’s fiscal position, a comparison of deficits and debt among the provinces, and national and international research and developments on government debt. Two roundtables were organized and held in Brandon and W ...
Institutions, Public Debt and Foreign Finance
... Within this basic setup, we then ask: how does the quality of financial institutions shape the government’s incentive to default? We find that better financial institutions increase the government’s cost of default by boosting banks’ leverage. Higher leverage indeed allows banks to a) purchase more ...
... Within this basic setup, we then ask: how does the quality of financial institutions shape the government’s incentive to default? We find that better financial institutions increase the government’s cost of default by boosting banks’ leverage. Higher leverage indeed allows banks to a) purchase more ...
Financial Ratios
... Calculating ratios is pointless unless you know how to use them The most basic rule is: a single ratio provides very little information and may be misleading With that in mind, there are at least 4 uses of ratios: ...
... Calculating ratios is pointless unless you know how to use them The most basic rule is: a single ratio provides very little information and may be misleading With that in mind, there are at least 4 uses of ratios: ...
par value - McGraw Hill Higher Education
... • Security is a form of attachment to property. – It provides that the property can be sold in event of default to satisfy the debt for which the security is given. – A mortgage is used for security in tangible property. For example, debt can be secured by mortgages on plant and equipment. – Debentu ...
... • Security is a form of attachment to property. – It provides that the property can be sold in event of default to satisfy the debt for which the security is given. – A mortgage is used for security in tangible property. For example, debt can be secured by mortgages on plant and equipment. – Debentu ...
Determinants of Firm`s Financial Leverage: A Critical
... underlying factors determining the firm’s financial leverage, there is no consensus and there is no universal factor determining financial leverage. The paper sets out two challenges for future research: one, how to integrate different factors determining firm’s financial leverage into a common fram ...
... underlying factors determining the firm’s financial leverage, there is no consensus and there is no universal factor determining financial leverage. The paper sets out two challenges for future research: one, how to integrate different factors determining firm’s financial leverage into a common fram ...
Debt Valuation, Renegotiation, and Optimal Dividend Policy
... Sundaresan (1996) and Mella-Barral and Perraudin (1997)]. The role of cash flow-based covenants in such a context has been examined by Anderson and Sundaresan (1996), among others. The presence of such covenants may induce the borrower to alter its dividend policies as well as to issue equity to finan ...
... Sundaresan (1996) and Mella-Barral and Perraudin (1997)]. The role of cash flow-based covenants in such a context has been examined by Anderson and Sundaresan (1996), among others. The presence of such covenants may induce the borrower to alter its dividend policies as well as to issue equity to finan ...
"International Reserves and Rollover Risk"
... default model are consistent with several features of emerging markets, including countercyclical spreads and procyclical borrowing. These papers, however, do not allow indebted governments to accumulate assets. We allow governments to simultaneously accumulate assets and liabilities and show that t ...
... default model are consistent with several features of emerging markets, including countercyclical spreads and procyclical borrowing. These papers, however, do not allow indebted governments to accumulate assets. We allow governments to simultaneously accumulate assets and liabilities and show that t ...
Fiscal Austerity during Debt Crises
... The recent European debt crisis has prompted an active debate in financial and policy circles on fiscal austerity. One side of the debate considers fiscal austerity plans to be beneficial because by increasing taxes, the government can avoid a default by more easily servicing and reducing the debt.1 ...
... The recent European debt crisis has prompted an active debate in financial and policy circles on fiscal austerity. One side of the debate considers fiscal austerity plans to be beneficial because by increasing taxes, the government can avoid a default by more easily servicing and reducing the debt.1 ...
Banking Relationships and REIT Capital Structure - DataPro
... capital market frictions that would force firms to have lower leverage, REITs with banking relationships should have better access to the debt markets in general (Johnson 1998).7 On the other hand, Brown and Marble (2007) show that the asset substitution problem decreases with the proportion of the ...
... capital market frictions that would force firms to have lower leverage, REITs with banking relationships should have better access to the debt markets in general (Johnson 1998).7 On the other hand, Brown and Marble (2007) show that the asset substitution problem decreases with the proportion of the ...
A New Structure for US Federal Debt
... overnight debt. It is essentially overnight debt that is rolled over by default unless the investor does something about it. Fixed-‐coupon debt trades the certainty of coupons for short-‐term price fluc ...
... overnight debt. It is essentially overnight debt that is rolled over by default unless the investor does something about it. Fixed-‐coupon debt trades the certainty of coupons for short-‐term price fluc ...
NBER WORKING PAPER SERIES PUBLIC DEBT MANAGEMENT IN BRAZIL Francesco Giavazzi Alessandro Missale
... This paper derives the optimal composition of the Brazilian public debt by looking at the relative impact of the risk and cost of alternative debt instruments on the probability of missing the stabilization target. This allows to price risk against the expected cost of debt service and thus to find ...
... This paper derives the optimal composition of the Brazilian public debt by looking at the relative impact of the risk and cost of alternative debt instruments on the probability of missing the stabilization target. This allows to price risk against the expected cost of debt service and thus to find ...
Firm Value
... MM’s propositions suggest that debt policy should not matter. However, in reality, debt matters a lot, and financial managers spend a great deal of their time worrying about the optimal debt to equity ratio for their firm. Which leads to a critical question: What is wrong with MM’s theory? copyright ...
... MM’s propositions suggest that debt policy should not matter. However, in reality, debt matters a lot, and financial managers spend a great deal of their time worrying about the optimal debt to equity ratio for their firm. Which leads to a critical question: What is wrong with MM’s theory? copyright ...
12. Misunderstanding the Great Depression and the Great
... the key fallacy is the proposition that debt has no macroeconomic effects. From Bernanke’s neoclassical perspective, debt merely involves the transfer of spending power from the saver to the borrower, while deflation merely increases the amount transferred, in debt servicing and repayment, from the ...
... the key fallacy is the proposition that debt has no macroeconomic effects. From Bernanke’s neoclassical perspective, debt merely involves the transfer of spending power from the saver to the borrower, while deflation merely increases the amount transferred, in debt servicing and repayment, from the ...
Fiscal Vulnerabilities and Risks from Local Government
... On this basis, IMF staff estimate the augmented government debt has risen to around 45 percent of GDP in 2012, having increased sharply through the global crisis. Nonetheless, that level still falls within sustainability thresholds. For 2012, staff estimate that the augmented net borrowing was aroun ...
... On this basis, IMF staff estimate the augmented government debt has risen to around 45 percent of GDP in 2012, having increased sharply through the global crisis. Nonetheless, that level still falls within sustainability thresholds. For 2012, staff estimate that the augmented net borrowing was aroun ...
Inflation, default and sovereign debt
... both in terms of the residence of the investor base and the denomination of the debt. In this section we summarize these empirical patterns of government debt portfolio composition that will be incorporated in the theoretical model to study their implications. The two features of a government's debt ...
... both in terms of the residence of the investor base and the denomination of the debt. In this section we summarize these empirical patterns of government debt portfolio composition that will be incorporated in the theoretical model to study their implications. The two features of a government's debt ...
Debt Maturity and the Dynamics of Leverage
... some or all of the maturing debt leads to a particularly significant reduction in the value of this option when it is at or in the money, i.e. if the value of the firms assets is already close to or less than the face value of debt. In this case the equityholders are willing to roll over maturing de ...
... some or all of the maturing debt leads to a particularly significant reduction in the value of this option when it is at or in the money, i.e. if the value of the firms assets is already close to or less than the face value of debt. In this case the equityholders are willing to roll over maturing de ...
Domestic Government Debt Structure, Risk Characteristics
... Since the early 1980s, the ratio of domestic government debt to gross domestic product (GDP) in Nigeria has risen sharply. By 1964, the level of domestic debt was 5.5 percent of GDP. A decade later (by 1974), this ratio went up slightly to 6.9 percent of GDP. But by 1984, the domestic debt /GDP rati ...
... Since the early 1980s, the ratio of domestic government debt to gross domestic product (GDP) in Nigeria has risen sharply. By 1964, the level of domestic debt was 5.5 percent of GDP. A decade later (by 1974), this ratio went up slightly to 6.9 percent of GDP. But by 1984, the domestic debt /GDP rati ...
Why is fiscal policy often procyclical?"
... where it is understood that he can get rents only while in o¢ ce (if the incumbent is not reappointed, then future political rents will be enjoyed by another politician in o¢ ce). The utility function v( ) is smooth, increasing and strictly concave. The political environment is adapted from Barro (1 ...
... where it is understood that he can get rents only while in o¢ ce (if the incumbent is not reappointed, then future political rents will be enjoyed by another politician in o¢ ce). The utility function v( ) is smooth, increasing and strictly concave. The political environment is adapted from Barro (1 ...
The cost of capital of levered equity is equal to the cost of capital of
... flow using the weighted average cost of capital. The value of the interest tax shield can then be found by comparing the value of the levered firm, VL, to the unlevered value, VU, of the free cash flow discounted at the firm’s unlevered cost of capital, the pretax WACC. VL = VU + PV(Interest Tax ...
... flow using the weighted average cost of capital. The value of the interest tax shield can then be found by comparing the value of the levered firm, VL, to the unlevered value, VU, of the free cash flow discounted at the firm’s unlevered cost of capital, the pretax WACC. VL = VU + PV(Interest Tax ...
Budget 2017-18 - Budget Paper No. 1
... considerations. Operational considerations often mean that the annual issuance program may not be equivalent to the financing task for a particular year. For example, the AOFM may decide there is merit in partially pre-funding the following year's financing task. Alternatively, the AOFM might choose ...
... considerations. Operational considerations often mean that the annual issuance program may not be equivalent to the financing task for a particular year. For example, the AOFM may decide there is merit in partially pre-funding the following year's financing task. Alternatively, the AOFM might choose ...
Debt Structure and Financial Flexibility
... related, theoretically, to flexibility: (1) the total level of debt, (2) the mix of short- vs longmaturity debt, (3) the mix of secured vs unsecured debt, and (4) the mix of senior and junior/subordinated debt. The literature generally agrees that a higher total level of debt can reduce future finan ...
... related, theoretically, to flexibility: (1) the total level of debt, (2) the mix of short- vs longmaturity debt, (3) the mix of secured vs unsecured debt, and (4) the mix of senior and junior/subordinated debt. The literature generally agrees that a higher total level of debt can reduce future finan ...