A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.

  • Topic classification is ongoing.
  • Please kindly let me know [mingze.gao@mq.edu.au] in case of any errors.

Your search

Result 1 resource

  • This article examines corporate debt values and capital structure in a unified analytical framework. It derives closed-form results for the value of long-term risky debt and yield spreads, and for optimal capital structure, when firm asset value follows a diffusion process with constant volatility. Debt values and optimal leverage are explicitly linked to firm risk, taxes, bankruptcy costs, risk-free interest rates, payout rates, and bond covenants. The results elucidate the different behavior of junk bonds versus investment-grade bonds, and aspects of asset substitution, debt repurchase, and debt renegotiation.

Last update from database: 5/16/24, 11:00 PM (AEST)