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This paper models a …rm's rollover risk generated by con ‡ict of interest between debt and equity holders. When the …rm faces losses in rolling over its maturing debt, its equity holders are willing to absorb the losses only if the option value of keeping the …rm alive justi…es the cost of paying o¤ the maturing debt. Our model shows that both deteriorating(More)
Financing can be cheaper in certain periods than others. For example, in crisis periods, firms face tougher financing terms than in normal times. We develop an analytically tractable dynamic framework for firms facing stochastic financing opportunities. Financially constrained firms choose intertemporal equity issuance, internal cash accumulation, corporate(More)
The thesis advanced by this dissertation is that convex sets of probability distributions provide a powerful representational framework for decision making activities in Robotics and Artiicial Intelligence. The primary contribution of this dissertation is the development of algorithms for inference and estimation in two domains. The rst domain is robustness(More)
OBJECTIVES The goals were to determine the prevalence of community-acquired methicillin-resistant Staphylococcus aureus colonization in patients with atopic dermatitis and to determine whether suppression of S aureus growth with sodium hypochlorite (bleach) baths and intranasal mupirocin treatment improves eczema severity. METHODS A randomized,(More)
  • Viral V Acharya, Peter Demarzo, Ilan Kremer, Kremer, Martin Dierker, Jennifer Huang +7 others
  • 2008
One of the most important ingredients in the process of price discovery in financial markets is the flow of new information. The importance of information flow is perhaps most apparent during times of market " crisis, " when it often seems that bad news is being reported simultaneously from multiple sources. This clustering of news could occur because firms(More)
In this paper, we develop an equilibrium model for stock market liquidity and its impact on asset prices when participation in the market is costly. We show that, even when agents' trading needs are perfectly matched, costly participation prevents them from synchronizing their trades, which gives rise to the endogenous need for liquidity. Moreover, the(More)
This paper presents an equilibrium model for the demand and supply of liquidity and its impact on asset prices and welfare. We show that when constant market presence is costly, purely idiosyncratic shocks lead to endogenous demand of liquidity and large price deviations from fundamentals. Moreover, market forces fail to lead to efficient supply of(More)
We survey more than 1,000 CEOs and CFOs to understand how capital is allocated, and decision-making authority is delegated, within firms. We find that CEOs are least likely to share or delegate decision-making authority in mergers and acquisitions, relative to delegation of capital structure, payout, investment, and capital allocation decisions. We study(More)
Firms face uncertain financing conditions and in particular the risk of a sudden rise in financing costs during financial crises. We capture the firm's precautionary and market timing motives in a tractable model of dynamic corporate financial management when external financing conditions are stochastic. While firms value financial slack and build cash(More)
Complex mortgages became a popular borrowing instrument during the bullish housing market of the early 2000s but vanished rapidly during the subsequent downturn. These non-traditional loans (interest only, negative amortization, and teaser mortgages) enable households to postpone loan repayment compared to traditional mortgages and hence relax borrowing(More)