Abínzano, Isabel; Seco, Luis; Escobar, Marcos; … - In: Economic Modelling 26 (2009) 5, pp. 910-917
In this paper we propose two first-passage-time approaches for pricing debt and equity when the firm is able to restructure its debt as an alternative to liquidation. In contrast to other first passage models that account for reorganization, our approaches allow the firm to restructure its debt...