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Innovations in Dequity Financing
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During the 1980s, and particularly since the market crash of 1987, corporations and entrepreneurs have been seeking new ways to finance the establishment and growth of new businesses. One of the outcomes of these efforts has been the hybrid security, generically called dequity because it is neither a bond nor a stock. In this work, Andrew Chen and John Kensinger examine the various forms of dequity, describing its characteristics, how it evolved, how it's being used, and what the future may hold for it.
In looking at the many financial innovations that blended the traits of debt and equity, Chen and Kensinger find three revolutionary changes that took place in the '80s: the use of debt to increase equity ownership by employees; the transfer of control over corporate resources from managers to lenders; and the shift from owning assets indirectly through corporate stock toward direct ownership of production assets by investors. They fully explore the increased specialization of roles that has resulted in employee control of companies, as well as detailing such practical issues as the tax advantage of leveraged ESOP, the value of organizational capital, innovative methods for reducing the cost of going public, and the benefits of R&D limited partnerships. This is the first book to fully analyze the development of dequity, and will be an important reference source for a variety of individuals, including investment bankers, corporate financial executives, institutional investors, and students of finance and banking.ANDREW H. CHEN is Distinguished Professor of Finance at the Edwin L. Cox School of Business, Southern Methodist University. He has authored or co-authored more than 50 articles for academic and professional publications, and is currently an editor of Research in Finance.
JOHN W. KENSINGER is Associate Professor of Finance at North Texas University (Denton). His articles and research papers have appeared in the Journal of Financial Economics, Research in Finance, Managerial and Decision Economics, and the Journal of Applied Corporate Finance, among other publications.• Author(s): Clear | James • Publisher: Penguin • Publisher Imprint: Penguin Random House • Subject: General Books
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