000			02011nam a22003017a 4500
003			ZW-GwMSU
005			20240301102832.0
008			240301b |||||||| |||| 00| 0 eng d
022			_a00222186
040			_aMSU _bEnglish _cMSU _erda
050			_aHB73 JOU
100	1		_aMansi, Sattar A. _eauthor
245	1	0	_aCreditor protection laws and the cost of debt _cby Sattar A. Mansi, William F. Maxwell and John K. Wald
264			_aChicago: _bUniversity of Chicago Press; _c2009.
336			_2rdacontent _atext _btxt
337			_2rdamedia _aunmediated _bn
338			_2rdacarrier _avolume _bnc
440			_aJournal of law and economics _vVolume 52, number 4
520			_aWe examine the impact of state payout restrictions on firms' credit ratings and bond yields. Using publicly traded bond data for a sample of large firms, we find that firms incorporated in states with more restrictive payout statutes (for example, New York and California) have better credit ratings and significantly lower yield spreads (about 8.7 percent) than do firms incorporated in less restrictive states (for example, Delaware). These results suggest that incorporation in a more restrictive state provides a credible commitment mechanism for avoiding some of the moral hazard problems associated with long‐term debt. This commitment corresponds to an economically and statistically significant difference in market yields and firm‐financing costs and is robust to controls for ownership, governance, debt type, Delaware or non‐Delaware incorporation, and covenant usage. Overall, our results are consistent with the notion that Delaware incorporation has hidden costs for some firms
650			_aBusiness structures _xCredit ratings
650			_aDebt _xDebt financing
650			_aFinancial leverage _xIncorporation
650			_aOutstanding debt _xState law
700			_aMaxwell, William F. _eco author
700			_aWald, John K. _eco author
856			_uhttps://doi.org/10.1086/605566
942			_2lcc _cJA
999			_c164032 _d164032