The paper explains why an issuer may wish to raise external capital by selling multiple financial claims that partition its total asset cash flows, rather than a single claim. It is shown that in an asymmetric information environment, the issuer's expected revenue is enhanced by such cash flow...

We study the problem of financial contracting between a firm and outside investors when the firm cannot commit to future payouts, but assets can be contracted upon. By analyzing the renegotiation between firm and investors in default, we show that a capital structure with multiple investors...