Isagawa, Nobuyuki; Yamaguchi, Satoru; Yamashita, Tadayasu - In: Journal of Financial Research 33 (2010) 3, pp. 267-287
<heading id="h1" level="1" implicit="yes" format="display">Abstract </heading>We provide a simple model for analyzing how debt forgiveness affects the stock price of a lending bank. Our model shows that although debt forgiveness increases shareholder wealth of a bank in healthy financial condition, it decreases shareholder wealth of a bank in unhealthy financial...