RETHINKING DYNAMIC CAPITAL STRUCTURE MODELS WITH ROLL-OVER DEBT
نویسندگان
چکیده
منابع مشابه
Rethinking dynamic capital structure models with roll-over debt∗
Dynamic capital structure models with roll-over debt rely on widely accepted arguments that have never been formalized. This paper clarifies the literature and provides a rigorous formulation of the equity holders’ decision problem within a game theory framework. We spell out the linkage between default policies in a rational expectations equilibrium and optimal stopping theory. We prove that t...
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In this paper the investment and liquidation policy of a levered firm is analyzed. The possibility of renegotiating the original debt contract is included. It is shown that the shareholders’ option to restructure the outstanding debt exacerbates Myers’ (1977) underinvestment problem. This result is due to a higher wealth transfer from the shareholders to the creditors occurring upon investment ...
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ژورنال
عنوان ژورنال: Mathematical Finance
سال: 2012
ISSN: 0960-1627
DOI: 10.1111/j.1467-9965.2012.00532.x