This project continues a line of research focusing on investor behavior, managerial objectives, asset pricing, and capital structure. Under the previous award the investigator concentrated on developing and analyzing single-period models in conjunction with various combinations of possible financial instruments. In particular, he analyzed the call provisions of convertible bonds, which is a relatively simple situation, to gain a better understanding of managerial objectives, conflicting interests between management and stockholders, and the rationality and objectives of stockholders. The purpose of this project is to extend the analysis to a multi-period setting, where financial managers and investors have asymmetric information. This research is important because it will provided a more fundamental understanding of financial markets. The research results should shed light on the issue of to what extent do financial managers adopt strategies that maximize shareholder wealth.