Journal of Finance Vol. 36 No. 1 1981
On the Matter of Parity among Financial Obligations
Abstract
The lessons of the leasing literature concerning the impact of leases on the debt capacity of a firm are reviewed and summarized to establish an approach to the analysis of the corporate bond refunding decision. A general proposition regarding financial obligation parity is established, and from that a clear bond refunding decision rule is developed. Previous debates in the literature about appropriate discount rates and about the appropriate cash flows to be discounted for refunding decisions are clarified.
- DOI
- 10.1111/j.1540-6261.1981.tb03537.x
- Volume
- 36
- Issue
- 1
- Pages
- 97-111
- Language
- en
- Sources
- openalex crossref