In this article, we have used a continuous EBIT-based model to study deferred taxation under default risk. Quite … surprisingly, default risk has been disregarded in research on deferred taxation. In order to underline its importance, we first … them as being risk-free loans. However, only a portion are subsequently repaid, due to default. This implies that, when a …

, suggesting that precautionary savings are central to understanding the effects of cash on credit risk"--National Bureau of … reserves are positively related to credit risk, resulting in a positive correlation between cash and spreads. In contrast …, spreads are negatively related to the "exogenous'' component of cash holdings that is independent of credit risk factors …

, suggesting that precautionary savings are central to understanding the effects of cash on credit risk … are positively related to credit risk, resulting in a positive correlation between cash and spreads. In contrast, spreads … are negatively related to the "exogenous'' component of cash holdings that is independent of credit risk factors …

, suggesting that precautionary savings are central to understanding the effects of cash on credit risk …, spreads are negatively related to the part of cash holdings that is not determined by credit risk factors. Similarly, although …