All documents from essays.org are for research assistance purpose only. Do not present the material as your own work!
bookmark & share the essay...
STUDY OF WHETHER CORPORATE GOVERNANCE AND LEASE FINANCING ARE COMPLIMENTS IN REDUCING AGENCY COST OF DEBT
This paper is a study on corporate governance and lease financing. It brings outs a discussion whether they are compliments in reducing agency costs of debt.
|language || ||english
|wordcount || ||4424 (cca 12 pages)
|contextual quality || ||N/A
|language level || ||N/A
|price || ||free
|sources || ||14
Table of contents
1.1 Background of the Study 3
1.2 Problem Statement 4
1.3 Objectives of the Study 4
1.4 Importance of the Study 5
2.0 CHAPTER TWO 6
LITERATURE REVIEW 6
2.1 Introduction 6
2.2.1 Complementary relation between agency cost reducing compensation structures and the use of leasing among larger firms. 7
2.3 Lease Financing versus debt financing 7
2.4 Measuring the strength of governance structure 8
CHAPTER THREE 10
3.0 RESEARCH METHODOLOGY 10
3.1 Introduction 10
3.2 Research design 10
3.3 Population of Study 11
3.4 Hypothesis 11
3.5 Data Collection 11
3.5 Data Analysis 12
Preview of the essay: STUDY OF WHETHER CORPORATE GOVERNANCE AND LEASE FINANCING ARE COMPLIMENTS IN REDUCING AGENCY COST OF DEBT
Lease financing is a well-recognized mechanism for reducing the agency costs of debt. This study examines whether firms that attempt to control the agency costs of equity through strong governance structures, including Chief Executive Officer Compensation alignment and Board structure, are more likely to use an agency cost reducing debt structure, such as leasing.
1.1 Background of the Study
In an efficient market, agency costs of debt would be borne by shareholders in the form of higher interest costs on debt or restrictions on shareholder–managerial discretion in the form of bond covenants (Chava, KumarandWarga, 2007). In such a market, where there is information symmetry, managers acting in shareholders’ interests would seek to minimize agency costs of debt through appropriate bond covenants and other mechanisms. That is, agency costs of debt and equity are reduced ex ante through ...
... of time to conduct the study may be a challenge since the study will involve analyzing of companies performance for five years, which will require a lot of time.
2. To get the historical data to measure performance of companies we will rely on information provided by NSE. Identifying the relevant information might be difficult owing to the massive data stored by NSE.
3. It might be hard to get the financial statements of the sampled firms in order to verify the data provided by NSE.
4. It might be costly to conduct the study over the five years including getting copies of all the financial statements of the firms listed in the NSE.
Essay is in categories