Essays in corporate finance

This dissertation studies the impact of credit rating on firms’ financing behavior and investigates insider trading activities. The first essay documents how firms’ concerns about credit rating change affect their choice between the use of debt and lease. Firms approaching a credit rating change ten...

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Main Author: GAO, Meng
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2018
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Online Access:https://ink.library.smu.edu.sg/etd_coll/169
https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1169&context=etd_coll
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spelling sg-smu-ink.etd_coll-11692019-05-17T08:28:45Z Essays in corporate finance GAO, Meng This dissertation studies the impact of credit rating on firms’ financing behavior and investigates insider trading activities. The first essay documents how firms’ concerns about credit rating change affect their choice between the use of debt and lease. Firms approaching a credit rating change tend to use less debt relative to operating leases to finance their new projects. In this paper, I propose a new method of measuring the potential of a credit rating change. Using the new measures, I find that not only the concerns about being downgraded but also the at- tempts to get upgraded have significant impacts. The result is surprising because rating agencies are fully aware of firms’ use of off-balance-sheet finance and make correspond- ing adjustments when they assess firms’ creditworthiness. There are two possible reasons for the result. First, the operating lease obligations are usually underestimated. Second, auditors tolerate more misstatement for disclosed off-balance-sheet items than they do for recognized balance sheet items. 2018-03-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/etd_coll/169 https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1169&context=etd_coll http://creativecommons.org/licenses/by-nc-nd/4.0/ Dissertations and Theses Collection (Open Access) eng Institutional Knowledge at Singapore Management University Credit Rating Off-balance-sheet Finance Corporate Governance Board of Directors Insider Trading Corporate Finance
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Credit Rating
Off-balance-sheet Finance
Corporate Governance
Board of Directors
Insider Trading
Corporate Finance
spellingShingle Credit Rating
Off-balance-sheet Finance
Corporate Governance
Board of Directors
Insider Trading
Corporate Finance
GAO, Meng
Essays in corporate finance
description This dissertation studies the impact of credit rating on firms’ financing behavior and investigates insider trading activities. The first essay documents how firms’ concerns about credit rating change affect their choice between the use of debt and lease. Firms approaching a credit rating change tend to use less debt relative to operating leases to finance their new projects. In this paper, I propose a new method of measuring the potential of a credit rating change. Using the new measures, I find that not only the concerns about being downgraded but also the at- tempts to get upgraded have significant impacts. The result is surprising because rating agencies are fully aware of firms’ use of off-balance-sheet finance and make correspond- ing adjustments when they assess firms’ creditworthiness. There are two possible reasons for the result. First, the operating lease obligations are usually underestimated. Second, auditors tolerate more misstatement for disclosed off-balance-sheet items than they do for recognized balance sheet items.
format text
author GAO, Meng
author_facet GAO, Meng
author_sort GAO, Meng
title Essays in corporate finance
title_short Essays in corporate finance
title_full Essays in corporate finance
title_fullStr Essays in corporate finance
title_full_unstemmed Essays in corporate finance
title_sort essays in corporate finance
publisher Institutional Knowledge at Singapore Management University
publishDate 2018
url https://ink.library.smu.edu.sg/etd_coll/169
https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1169&context=etd_coll
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