Dodging Bullets: Changing U.S. Corporate Capital Structure in the 1980s and 1990s
Editorial Reviews
Book Description
The late 1980s saw a huge wave of corporate leveraging. The U.S. financial landscape was dominated by a series of high-stakes leveraged buyouts as firms replaced their equity with new fixed debt obligations. Cash-financed acquisitions and defensive share repurchases also decapitalized corporations. This trend culminated in the sensational debt-financed bidding for RJR-Nabisco, the largest leveraged buyout of all time, before dramatically reversing itself in the early 1990s with a rapid return to equity.
This entertaining summary of the broad reshaping of U.S. corporate finance in the last decade and a half looks at three major issues: why corporations leveraged up in the first place, why and how the leverage wave came to an end, and what policy lessons are to be drawn.
Using the Minsky-Kindleberger model as a framework, the authors interpret the rise and fall of leveraging as a financial market mania. In the course of chronicling the return to equity in the 1990s, they address a number of important corporate finance questions: How important was the return to equity in relieving corporations' debt burdens? How did the return to equity affect the ability of young high-tech firms to finance themselves without selling out to foreign firms?
About the Author
Robert N. McCauley is a Senior Economic and Financial Representative with the Asian Office of the Bank for International Settlements in Hong Kong. Judith S. Ruud is a Principal Analyst at the Congressional Budget Office, Washington, DC. Frank Iacono is a Vice President at Chase Securities, Inc., in New York City.
Dodging Bullets: Changing U.S. Corporate Capital Structure in the 1980s and 1990s,Robert N. McCauley,Judith S. Ruud,Frank Iacono,The MIT Press,0262133512,20th century,Business & Economics,Business / Economics / Finance,Business/Economics,Consolidation and merger of co,Consolidation and merger of corporations,Corporate Finance,Corporate Mergers And Acquisitions,Corporations,Finance,History,Industries - General,Leveraged buyouts,United States,Business & Economics / Finance,Industry & Industrial Studies,USA,c 1980 to c 1990,c 1990 to c 2000
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