Bank's capital structure under non-diversifiable risk
The aim of this paper is to study the design of optimal capital structure of a “large” intermediary when the intermediary faces a non-diversifiable risk, within the standard costly-state-verification (CSV) model. I demonstrate that, under weaker conditions, a “large” intermediary realizes more efficient allocation by issuing both debt and equity than by issuing only debt. Unlike Diamond (1984) and Williamson (1986), the set of optimal contracts involves ex ante monitoring made by shareholders of the intermediary. Changes in parameters, such as the variance of the aggregate risk or the cost of monitoring, affect bankruptcy costs and the capital structure.
With the use of data and concrete examples, such as ::: a mini-case study, and a focus on the top 20 global players, this ::: thesis aims at tackling Capex issues in the telecom industry by ::: covering: – Uses, levels, inefficiencies in Capex management, ::: notably via insider perspective, and their impacts on capital ::: allocation; – Financing of Capex via debt and the recent ::: development of asset monetization; – Specific trends (NSA, VNOs) ::: and M&A in the telecom industry and their impacts on Capex, via ::: the case study of the French SFR-Numericable ::: transaction.