Three essays on inside debt
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[ACCESS RESTRICTED TO THE UNIVERSITY OF MISSOURI AT AUTHOR'S REQUEST.] This dissertation is composed of three essays examining inside debt. The first essay tests the impact of inside debt on security issuance decisions. I find that CEOs with high debt incentives are more likely to issue equity that debt, unlever firm capital structure, and hold debt of longer average maturity. The results indicate that managers with high debt incentives favor financing decisions that decrease firm risk. The second essay examines the determinants of use and magnitude of inside debt. I find a positive association between inside debt and CEO talent. In addition, I find that inside debt affects the likelihood of CEO post-retirement board service and CEO successor characteristics. The third essay examines the impact of inside debt on corporate dividend policy. I find that companies with large CEO holdings of inside debt are more likely to pay and increase dividends, and have larger dividend payouts. The results indicate that inside debt, by reducing firm risk, positively influences corporate dividend policy.
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