optimal asset control of the diffusion model under consideration of the time value of ruin

‎in this paper‎, ‎we consider the optimal asset control of a financial company which can control its liquid reserves by paying dividends and by issuing new equity‎. ‎we assume that the liquid surplus of the company in the absence of control is modeled by the diffusion model‎. ‎it is a hot topic to maximize the expected present value of dividends payout minus equity issuance until the time of bankruptcy‎. ‎we study this problem under consideration of the time value of ruin‎. ‎by constructing two categories of suboptimal models‎, one with classical model without equity issuance, and the other which never goes bankrupt by equity issuance,‎ ‎the optimal problem is addressed‎. ‎at the end‎, ‎some numerical examples and interesting economic interpretations are presented‎.