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What is corporate governance?
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Key topics
 The big picture
 Stock price formation
 Fundamental value analysis
International corp. governance

Incentive mechanisms
 Decision system
Performance monitoring
 Incentive based compensation
 Bankruptcy system
 Ownership structure
 Creditor structure
 Capital structure
 Market for corporate control
Labor market competition
Product market competition

Related topics
Transaction cost economics
 Positive economics



Capital structure

Introduction: The capital structure is defined by the firm’s policy with regard to leverage and dividend payments. It is of major importance in corporate governance because it can determine the incentives of managers and thereby the economic efficiency of the corporations they manage. A classic reference on capital structures is Jensen [1986].


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