Business Commons^™

Reit Capital Structure: The Value Of Getting It Right, Eva Steiner

Eva Steiner

An analysis of the capital structure of commercial real estate investment trusts finds that the strongest REITs overall tend to employ lower leverage and longer debt maturity, maintain larger proportions of fixed-rate debt, rely less on secured debt, have a greater line of credit capacity but use it less, and hold smaller cash reserves. The REITs’ strength is measured by Tobin’s q, which expresses the ratio of the market value of assets relative to their book value. The study examines yearly data for the years 1993 through 2013 for 137 REITs based in the United States and the years 2001 …

The Financial Services Industry And Society: The Role Of Incentives/Punishments, Moral Hazard, And Conflicts Of Interests In The 2008 Financial Crisis, Noel Murray, Ajay K. Manrai, Lalita Ajay Manrai

Business Faculty Articles and Research

Purpose

This paper aims to present an analysis of the role of financial incentives, moral hazard and conflicts of interests leading up to the 2008 financial crisis.

Design/methodology/approach

The study’s analysis has identified common structural flaws throughout the securitization food chain. These structural flaws include inappropriate incentives, the absence of punishment, moral hazard and conflicts of interest. This research sees the full impact of these structural flaws when considering their co-occurrence throughout the financial system. The authors address systemic defects in the securitization food chain and examine the inter-relationships among homeowners, mortgage originators, investment banks and investors. The authors also …