Option compensation, dynamic investment and capital structure
构建了一个经理自由裁量权的动态权衡模型，研究股票期权薪酬如何影响经理交织的资本结构和动态投资决策，发现期权授予激励经理进行当前和未来投资，且对杠杆的影响因企业风险而异。
Abstract We develop a dynamic trade‐off model of managerial discretion to investigate how stock option compensation relates to managers' intertwined capital structure and dynamic investment decisions. Our model predicts that option grants provide managers with incentives to undertake both current and future investments, in sharp contrast to the effects of stock compensation. With an increase in option compensation, managers in low‐ (high‐) risk firms tend to increase (decrease) firm leverage, while the opposite is true when stock pay increases. This result offers an innovative prospective on the empirical tests of the relationship between option compensation and capital structure.