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138 results on '"Demarzo, Peter M."'

29. Computing equilibria of GEI by relocalization on a Grassmann manifold

Author

Demarzo, Peter M. and Eaves, B. Curtis

Subjects
Equilibrium (Economics) -- Analysis, Homotopy theory -- Research, Markets (Economics) -- Analysis, Economics, Mathematics
Abstract

The equilibria of general economic models with incomplete asset markets or GEI can be calculated by utilizing an algorithm based on the existence of a route of zeros of a homotopy. The domain of the homotopy includes a Grassmann Manifold and the price simplex. Relocalization may be necessary after localization and following diffeomorphic pieces in Euclidean space.

Published
1996

31. Corporate financial hedging with proprietary information

Author

DeMarzo, Peter M. and Duffie, Darrell

Subjects
Stockholders -- Finance, Financial markets -- Economic aspects, Information theory in economics -- Models, Hedging (Finance) -- Research, Business, Economics
Published
1991

32. Portfolio Liquidity and Security Design with Private Information.

Author

DeMarzo, Peter M, Frankel, David M, and Jin, Yu

Subjects
*PORTFOLIO management (Investments), *LIQUIDITY (Economics), *LIQUIDATION, *SECURITIES, *FINANCIAL management
Abstract

A privately informed seller seeks to liquidate a portfolio to raise cash. Each asset's liquidity thus depends on the impact of its sale on the value of the entire portfolio. We demonstrate the importance of cross-signaling and derive sufficient conditions for a liquidity "pecking order" that determines the order of sale. For assets backed by a common pool, liquidity naturally aligns with seniority. Finally, we extend the portfolio liquidation game to consider security design and demonstrate the optimality of pooling securities and selling senior tranches or debt secured by the pool, with retention increasing in asset quality or informational asymmetry. [ABSTRACT FROM AUTHOR]

Published
2021
Full Text
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34. Corporate Finance, Global Edition

Author

Berk, Jonathan B., DeMarzo, Peter M., Berk, Jonathan B., and DeMarzo, Peter M.

Subjects
Corporations--Finance
Abstract

For MBA/graduate students taking a course in corporate finance. An Emphasis on Core Financial Principles to Elevate Individuals'Financial Decision MakingUsing the unifying valuation framework based on the Law of One Price, top researchers Jonathan Berk and Peter DeMarzo have set the new canon for corporate finance textbooks. Corporate Finance, Fourth Edition blends coverage of time-tested principles and the latest advancements with the practical perspective of the financial manager, so students have the knowledge and tools they need to make sound financial decisions in their careers. For a streamlined book specifically tailored to the topics covered in the first one-semester course, Corporate Finance: The Core is also available by Jonathan Berk and Peter DeMarzo. MyFinanceLabTM not included. Students, if MyFinanceLab is recommended/mandatory component of the course, please ask your instructor for the correct ISBN and course ID. MyFinanceLab should only be purchased when required by an instructor. Instructors, contact your Pearson representative for more information.MyFinanceLab is an online homework, tutorial, and assessment product designed to personalize learning and improve results. With a wide range of interactive, engaging, and assignable activities, students are encouraged to actively learn and retain tough course concepts.

Published
2017

35. Corporate Finance: The Core, Global Edition

Author

Berk, Jonathan B., DeMarzo, Peter M., Berk, Jonathan B., and DeMarzo, Peter M.

Subjects
Corporations--Finance
Abstract

For MBA/graduate students taking a course in corporate finance.An Emphasis on Core Financial Principles to Elevate Individuals'Financial Decision MakingBerk and DeMarzo's Corporate Finance uses a unifying valuation framework, the Law Of One Price, to present the core content instructors expect, the new ideas they want, and the pedagogy their students need to succeed. Corporate Finance: The Core fits programs and individual professors who desire a streamlined book that is specifically tailored to the topics covered in the first one-semester course. For programs and professors who would like to use a text in a two semester, or more, sequence, please see Corporate Finance, the 31-chapter book also by Jonathan Berk and Peter DeMarzo. MyFinanceLab™ not included. Students, if MyFinanceLab is a recommended/mandatory component of the course, please ask your instructor for the correct ISBN and course ID. MyFinanceLab should only be purchased when required by an instructor. Instructors, contact your Pearson representative for more information.MyFinanceLab is an online homework, tutorial, and assessment product designed to personalize learning and improve results. With a wide range of interactive, engaging, and assignable activities, students are encouraged to actively learn and retain tough course concepts.

Published
2017

37. Corporate Finance: The Core, Global Edition

Author

Berk, Jonathan B., DeMarzo, Peter M., Berk, Jonathan B., and DeMarzo, Peter M.

Subjects
Corporations--Finance
Abstract

Berk and DeMarzo's Corporate Finance uses a unifying valuation framework, the Law Of One Price, to present the core content instructors expect, the new ideas they want, and the pedagogy their students need to succeed. Corporate Finance: The Core fits programs and individual instructors who desire a streamlined book that is specifically tailored to the topics covered in the first one-semester course. For instructors who would like to use a text in a two semester, or more, sequence, please see Corporate Finance, the 31 chapter book also by Jonathan Berk and Peter DeMarzo.

Published
2014

41. Debt Overhang and Capital Regulation

Author

Admati, Anat R., DeMarzo, Peter M., Hellwig, Martin F., and Pfleiderer, Paul C.

Subjects
G28, deleveraging, capital structure, Bankenregulierung, Eigentümerstruktur, bankruptcy costs, G38, K23, bank equity, Basel, Basler Akkord, financial institutions, recapitalization, Verbindlichkeiten, capital regulation, systemic risk, ddc:330, underinvestment, G21, G32, too big to fail, Kapitalstruktur, H81, debt overhang, Theorie
Abstract

We analyze shareholders' incentives to change the leverage of a firm that has already borrowed substantially. As a result of debt overhang, shareholders have incentives to resist reductions in leverage that make the remaining debt safer. This resistance is present even without any government subsidies of debt, but it is exacerbated by such subsidies. Our analysis is relevant to the debate on bank capital regulation, and complements Admati et al. (2010). In that paper we argued that subsidies that favor debt over equity are the key reason that banks funding costs would be lower if they economize on equity. Subsidies come from public funds, and reducing them does not represent a social cost. It is thus irrelevant for assessing regulation. Other arguments made to support claims that equity is expensive are flawed. Like reduction in subsidies, the effects of leverage reduction on bank managers or shareholders do not represent a social cost. In fact, we show that debt overhang creates inefficiency, since shareholders would resist recapitalization even when this would increase the combined value of the firm to shareholders and creditors. Moreover, debt overhang creates an addiction to leverage through a ratchet effect. In the presence of government guarantees, the inefficiencies of excessive leverage are not fully reflected in banks' borrowing costs. Since banks' high leverage is a source of systemic risks and imposes costs on the public, resistance to leverage reduction leads to social inefficiencies. The main beneficiaries from high leverage may be bank managers. The majority of the banks' shareholders, who hold diversified portfolios and who are part of the public, are likely to be net losers. Our analysis highlights the critical importance of effective capital regulation and high equity requirements, especially for large and systemic financial institutions. We analyze shareholders' preferences when choosing among various ways leverage can be reduced. We show that, with homogeneous assets, if the firm's security and asset trades have zero NPV, and the firm has a single class of debt outstanding, then shareholders find it equally undesirable to deleverage through asset sales, pure recapitalization, or asset expansion with new equity. When these conditions are not met, shareholders can have strong preferences for one approach over another. For example, if the firm can buy back junior debt, asset sales are the preferred way to reduce leverage. This preference for asset sales, or deleveraging can persist even if such sales are inefficient and reduce the total value of the firm.

Published
2012

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