Houston, Joel F.; Venkataraman, S. - In: Journal of Financial and Quantitative Analysis 29 (1994) 02, pp. 179-197
This paper provides an explanation for why firms may choose to simultaneously issue multiple debt claims with varying maturities. The optimal mix of short- and long-term debt allows the firm to precommit to a more efficient liquidation policy. Even in risk-neutral settings, the optimal mix...