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How Firm Financial Policy Affects Investment Policy
Essay specific features


Written by:
Alice L
Date added:
May 3, 2016
Level:
University
Grade:
A
No of pages / words:
6 / 1482
Was viewed:
2562 times
Rating of current essay:
Essay content:
New research suggests that creditors play a much more direct role in firm investment policy than has been previously recognized.
Private credit agreements represent an ideal—and largely overlooked—setting for examining the influence of finance on investment. A private credit agreement specifies the amount, interest rate, and other terms of a loan provided by a syndicate of banks to a firm...
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Roughly 80 percent of all public firms maintain private credit agreements. Compared with public bonds, private credit agreements contain covenants that are more detailed, comprehensive, and tightly set, making an analysis of private contracts essential to understanding the impact of external finance on firm behavior...
displayed 300 characters
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