Optimal Dividend and Capital Structure with Debt Covenants
نویسندگان
چکیده
منابع مشابه
Debt Valuation, Renegotiation, and Optimal Dividend Policy
The valuation of debt and equity, reorganization boundaries, and firm’s optimal dividend policies are studied in a framework where we model strategic interactions between debt holders and equity holders in a game-theoretic setting which can accommodate varying bargaining powers to the two claimants. Two formulations of reorganization are presented: debt-equity swaps and strategic debt service r...
متن کاملOptimal Debt Ratio and Dividend Payment Strategies with Reinsurance
This paper derives the optimal debt ratio and dividend payment strategies for an insurance company. Taking into account the impact of reinsurance policies and claims from the credit derivatives, the surplus process is stochastic that is jointly determined by the reinsurance strategies, debt levels, and unanticipated shocks. The objective is to maximize the total expected discounted utility of d...
متن کاملAsset Substitution, Debt Overhang, and Optimal Capital Structure
This article uses a contingent-claims valuation method to compare debt financing, investment, and risk choices of a firm adopting the second-best strategy with those of a firm adopting the first-best strategy. The former bears the agency costs, as conjectured by Jensen and Meckling (1976) and Myers (1977), because it chooses suboptimal investment timing and risk levels, while the latter is able...
متن کاملDynamic Capital Structure with Callable Debt and Debt Renegotiations
We consider a dynamic model of the capital structure of a firm with callable debt that takes into account that equity holders and debt holders have a common interest in restructuring the firm’s capital structure in order to avoid bankruptcy costs. Far away from the bankruptcy threat the equity holders use the call feature of the debt to replace the existing debt in order to increase the tax adv...
متن کاملAn Optimal Dividend and Investment Control Problem under Debt Constraints
This paper concerns with the problem of determining an optimal control on the dividend and investment policy of a firm. We allow the company to make an investment by increasing its outstanding indebtedness, which would impact its capital structure and risk profile, thus resulting in higher interest rate debts. We formulate this problem as a mixed singular and switching control problem and use a...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Journal of Optimization Theory and Applications
سال: 2020
ISSN: 0022-3239,1573-2878
DOI: 10.1007/s10957-020-01760-4