This paper investigates the optimal management of a firm faced with a long-term liability that occurs at a random date. Three issues are analysed: the optimal dividend policy; optimal expenditure on safety to delay the occurrence of the liability; and the optimal liquidation date of the firm. An owner faced with dynamic unlimited liability never liquidates and therefore accumulates capital to t...

In the past few years, there have been several new developments in the way real estate investment trusts (REITs) access capital. There has been an increasing trend toward the use of unsecured debt, and REITs may also alter their dividend policy in order to generate capital internally to the extent they can. There has been little empirical research into the market's reaction to unsecured debt an...