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Full-Text Articles in Finance and Financial Management
Risk-Adjusted Inside Debt, Zhichuan Li, Shannon Lin, Shuna Sun, Alan Tucker
Risk-Adjusted Inside Debt, Zhichuan Li, Shannon Lin, Shuna Sun, Alan Tucker
Business Publications
Compensation theory holds that executive aggression is related to both the level and riskiness of “inside debt” - promises from firms to pay their executives fixed sums of cash in the future, including pensions and deferred compensation. However, previous researchers have only examined the level of inside debt. We provide an inside debt metric that is conceptually superior to previously used metrics, as it incorporates the riskiness of inside debt. For the entire sample, our metric offers modest improvement in fit over past metrics, where the dependent variable is future equity return volatility. Furthermore, the relation between future volatility and …
Risk-Adjusted Inside Debt, Frank Li, Shannon Lin, Shuna Lin, Alan Tucker
Risk-Adjusted Inside Debt, Frank Li, Shannon Lin, Shuna Lin, Alan Tucker
Business Publications
Compensation theory holds that executive aggression is related to both the level and riskiness of “inside debt” - promises from firms to pay their executives fixed sums of cash in the future, including pensions and deferred compensation. However, previous researchers have only examined the level of inside debt. We provide an inside debt metric that is conceptually superior to previously used metrics, as it incorporates the riskiness of inside debt. For the entire sample, our metric offers modest improvement in fit over past metrics, where the dependent variable is future equity return volatility. Furthermore, the relation between future volatility and …