| Executive Stock Option, Mediation of Agency Costs and Allocation of Power in Levered Firms |
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| 作者姓名： | 刘鸿雁 孔峰 张维 |
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| 作者单位： | [1]DepartmentofEconomiesandManagement,NorthChinaElectricPowerUniversity,Baoding071003,China [2]SchoolofManagement,TianfinUniversity,Tianfin300072,China／／TianjinUniversityofFinanceandEconomics,Tianfin300222,China |
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| 基金项目： | TheDoctorialResearchFoundationofNorthChinaElectricPowerUniversity(No.552). |
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| 摘 要： | The relationship between options and agency costs in levered firms is studied by modeling the effect of executive stock options on the manager‘s investment strategy in levered firms. Stock options do not necessarily aggravate agency costs in levered finns. The corporate governance affects agency costs greatly. If debt-holders were entitled to design executive stock options together with stockholders, by allocating power properly between stockholders and debt-holders, firm value could be enhanced greatly. The following way of allocating power between the two parties is proposed: the exercise price should be the weighted average of the stockholders‘ and debtholders‘ suggested exercise prices. The weight allocated to debt-holders is positively related to the amount of debts that debt-holders lend to stockholders.
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| 关 键 词： | 认股权 执行程序 预购股票价格 政府部门债务 |
Executive Stock Option, Mediation of Agency Costs and Allocation of Power in Levered Firms |
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| Liu Hongyan,KONG Feng,Zhang Wei.Executive Stock Option, Mediation of Agency Costs and Allocation of Power in Levered Firms[J].Journal of Southwest Jiaotong University,2005,13(1):78-83. |
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| Authors: | Liu Hongyan KONG Feng Zhang Wei |
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| Abstract: | The relationship between options and agency costs in levered firms is studied by modeling the effect of executive stock options on the manager's investment strategy in levered firms. Stock options do not necessarily aggravate agency costs in levered firms. The corporate governance affects agency costs greatly. If debt-holders were entitled to design executive stock options together with stockholders, by allocating power properly between stockholders and debt-holders, firm value could be enhanced greatly. The following way of allocating power between the two parties is proposed: the exercise price should be the weighted average of the stockholders' and debt-holders' suggested exercise prices. The weight allocated to debt-holders is positively related to the amount of debts that debt-holders lend to stockholders. |
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| Keywords: | Executive stock options Exercise price Agency costs Levered firms Incentive |
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