Does Debt Diversification lead to a Discount in Firm Value?

Corporate firms access multiple sources of debt simultaneously. This study analyzes the impact of debt diversification on firm value. We argue that, when firms diversify their debt sources, the monitoring role played by debt holders decreases as a result of the free rider problem. Hence, such firms should experience a value discount in the capital markets. Our empirical analysis provides evidence for the existence of a value discount in the capital markets for firms accessing multiple sources of debt. Our results remain robust for alternative measures of debt diversification

The relationship between human capital and firm value: Evidence from Indian firms

The purpose of this paper is to investigate whether human capital affects firm value by following a positive methodological approach. According to the clas- sical theory of economic growth, the output of a country depends on its human and physical capital. At the micro-level, the same theory holds true for firm output. Thus, the human capital of a firm should play a significant role in firm performance and therefore firm valuation. Our results show a positive relationship between human capital and firm value. Human capital creates value; first, by better utilization of current growth opportunities; second, by creating future growth opportunities, and lastly, by reducing the volatility associated with the firm growth rate. Also, we test the size effect on the relationship between human capital and firm value and do not find any differential impact