Capital structure and debt priority

Abstract : In a simple structural model, we derive closed form solutions for the market values of a defaultable firm's debt and equity when debt has a heterogeneous priority structure - under the form of senior and junior bonds - and the absolute priority rule prevails. The firm is subject to liquidity and solvency risks and liquidation is immediate upon bankruptcy. We investigate the two-sided issue of optimal capital structure and optimal debt priority. We also examine the spread differential between senior and junior bonds
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Communication dans un congrès
AFFI 9th International Paris Finance Meeting, Dec 2011, Paris, France. 44 p., 2011
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https://hal-rbs.archives-ouvertes.fr/hal-00756211
Contributeur : Sandrine Palmer <>
Soumis le : jeudi 22 novembre 2012 - 15:47:42
Dernière modification le : lundi 18 mai 2015 - 12:55:08

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  • HAL Id : hal-00756211, version 1

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Sami Attaoui, Patrice Poncet. Capital structure and debt priority. AFFI 9th International Paris Finance Meeting, Dec 2011, Paris, France. 44 p., 2011. 〈hal-00756211〉

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