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Debt service parity approach |
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Debt service parity approachPayment alternatives that provide the firm with the exact same schedule of after-tax debt payments (including both interest and principal).Debt service parity approach Similar MatchesSignaling approachSignaling approachNotion that insiders in a firm have information that the market does not have, and that the choice of capital structure by insiders can signal information to outsiders and change the value of the firm. This theory is also called the asymmetric information approach. Variance minimization approach to trackingVariance minimization approach to trackingAn approach to bond indexing that uses historical data to estimate the variance of the tracking error. Portfolio approachPortfolio approachAn approach to explaining exchange rates that stresses their role in changing the proportions of different currency-denominated assets in portfolios. The exchange rate adjusts to equate these proportions to desired levels. Monetary approachMonetary approachA framework for analyzing exchange rates and the balance of payments that focuses on supply and demand for money in different countries. A floating exchange rate is assumed to equate supply and demand and thus to reflect relative growth rates of money supplies and determinants of demand. Under a pegged exchange rate, the balance of payments surplus or deficit equals the excess demand or supply, respectively, for a country's money. Residual dividend approachResidual dividend approachAn approach that suggests that a firm pay dividends if and only if acceptable investment opportunities for those funds are currently unavailable. Further SuggestionsAbsorption approachElasticities approach Optimization approach to indexing Asset approach Top down approach Formula approach Risk premium approach Market Value Approach Cross sectional approach Stratified sampling approach to indexing |
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