BRAOUEZEC, YANN; LEHALLE, CHARLES-ALBERT - In: International Journal of Theoretical and Applied … 13 (2010) 04, pp. 537-576
We study the simplest discrete-time finite-maturity model in which default arises when the firm is not able to pay its debt obligation using the current cash-flow plus the corporate liquidity. An important distinction is made between liquidity and solvency of the firm. The corporate financial...