Leveraged Buy Out: Dynamic Agency Model with Write-Off Option

O. Yousfi
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引用次数: 1

Abstract

We present a dynamic agency model in which the LBO fund may write the entrepreneur's project off at the end of the starting stage to invest in a competitive project. The two partners provide unobservable efforts in both stages to enhance the productivity of the acquired company. We show that under restrictive conditions, the debt-equity contracts induce the entrepreneur and the LBO fund to provide the first best efforts under restrictive conditions in the two stages. Moreover, the write-off threat boosts the incentives of the entrepreneur and the LBO fund such that they provide high efforts. If the compensation cost is exogenous, the sharing rule of this cost depends on the quality of the competitive project. The entrepreneur and the bank share the amount of compensation if it is not very profitable. Otherwise, it is pledged to the entrepreneur. If the compensation's amount is endogenous, in order to induce the entrepreneur to provide high effort, the optimal financial contracts must give her the entire compensation's revenue.
杠杆收购:带有冲销权的动态代理模型
我们提出了一个动态代理模型,在该模型中,杠杆收购基金可能在创业阶段结束时注销企业家的项目,以投资于有竞争力的项目。双方在这两个阶段都为提高被收购公司的生产率做出了不可观察的努力。研究表明,在约束条件下,债股权契约诱导企业家和杠杆收购基金在约束条件下提供两个阶段的第一最佳努力。此外,冲销威胁提高了企业家和杠杆收购基金的激励,使他们付出了很高的努力。如果补偿成本是外生的,则补偿成本的分担规则取决于竞争项目的质量。如果不是很赚钱,企业家和银行分享补偿金额。否则,它将被质押给企业家。如果补偿金额是内生的,为了促使企业家付出更大的努力,最优金融契约必须给予企业家全部的补偿收益。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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