This paper addresses the following unresolved questions: Why do some firms issue equity instead of debt? Why did most firms retain their cash holdings instead of distributing them as dividends in recent times? How do firms change their financing policies during a period of severe financial...

This paper provides analytical solutions and regularity results for some second order PDEs of degenerate elliptic type. The motivation is to study several economic models with uncertainty where the variables are constrained by constant barriers.