Equity Issues and Ownership Structure in France

The question of how a fi rm's value is affected by modifi cations to its fi nancial structure has given rise to a signifi cant body of literature, both theoretical and empirical. Within the framework of Jensen and Meckling's (1976) agency theory, fi nancial policy is viewed as a way of resolving confl icts among managers, shareholders and creditors. The optimal fi nancial structure results from a trade-off between debt and equity agency costs. One way to monitor managers or solve informational asymmetry problems is to issue hybrid securities.