Journal article
Strategic Decision Making of the Firm Under Asymmetric Information
Abstract
This paper develops a simple signaling model whereby high valuation firm uses levels of investment, debt and dividends to convey information to the market regarding its valuation. Conditions are determined under which investment, debt and dividends are employed in a separating Nash equilibrium. Unlike many other signaling models where the source of asymmetric information concerns only the mean of the firms' cash flow, our model allows for two …
Authors
Luo GY; Brick I; Frierman M
Journal
Review of Quantitative Finance and Accounting, Vol. 19, No. 2, pp. 215–237
Publisher
Springer Nature
Publication Date
September 2002
DOI
10.1023/a:1020687113058
ISSN
0924-865X