The following information was submitted:
Transactions: WSEAS TRANSACTIONS ON INFORMATION SCIENCE AND APPLICATIONS
Transactions ID Number: 29-842
Full Name: Jyh-Horng Lin
Position: Professor
Age: ON
Sex: Male
Address: 151 Ying-Chuan Road, Tamsui, Taipei County 251,
Country: TAIWAN
Tel: 886-2-26215656ext.2878
Tel prefix:
Fax: 886-2-26209732
E-mail address: lin9015@mail.tku.edu.tw
Other E-mails: jjlinster@gmail.com
Title of the Paper: optimal bank interest margin and shareholder interest conflicts under ceo overconfidence:a constrained option-pricing model
Authors as they appear in the Paper: Jyh-Horng Lin, Peirchyi Lii And Rosemary Jou
Email addresses of all the authors: lin9015@mail.tku.edu.tw,pclii@asia.edu.tw,893560135@s93.tku.edu.tw
Number of paper pages: 11
Abstract: Less is known about how equity returns allocated between current and new shareholders are altered to react to chief executive officer (CEO) overconfidence. This paper uses a nonlinear constrained contingent claim methodology of Black and Scholes (1973) and Merton (1974) to explore interest conflicts between current and new shareholders when an overconfident bank CEO overestimates returns on investment projects, and sequentially raises too much in external funds when internal resources become scarce. We show that low levels of bank interest margins or equity returns, which decrease the claims of current shareholders, are associated with investment distortions; but high levels of bank equity returns, which dilute the claims of current shareholders, are associated with external financing distortion.
Keywords: CEO Overconfidence, Bank Margin, Call Pricing
EXTENSION of the file: .pdf
Special (Invited) Session: optimal bank interest margin and shareholder interest conflicts under ceo overconfidence:a constrained option-pricing model
Organizer of the Session: 639-271
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