Optimal Financial Instruments Journal Article uri icon



  • ABSTRACTDebt and equity are developed as optimal financial instruments in a model where cash flows and control rights are allocated to investors endogenously. When investment decisions must be made by a single party, the debtholder's cash flows are fixed in order to provide the equityholder with efficient incentives for investment. Ownership of control may be transferred to the debtholder to attenuate the impact of asymmetric information, concerning the investment opportunity, on the efficiency of the decision making.

publication date

  • December 1, 1991

has restriction

  • closed

Date in CU Experts

  • June 26, 2014 3:58 AM

Full Author List


author count

  • 1

Other Profiles

International Standard Serial Number (ISSN)

  • 0022-1082

Electronic International Standard Serial Number (EISSN)

  • 1540-6261

Additional Document Info

start page

  • 1645

end page

  • 1663


  • 46


  • 5