, the model reflects empirical credit spread patterns, rationalizes the observed joint distribution of corporate events and … generates novel implications for the impact of renegotiable debt on covenant and investment policies …

corporate policies. To that end, we build, solve, and estimate a range of dynamic models of corporate investment and financing … observed corporate investment and financing policies across various samples. Our tests, based on empirical policy function …

This paper investigates how firms manage their cash savings, financing, and investment when aggregate uncertainty is …, investment irreversibility, and time-varying risk premia. In my model, firms have a precautionary-savings motive and real options … issuance, (2) firms with low profitability and high cash are more likely to delay payout, and (3) aggregate equity issuance and …

Private debt contracts tend to have covenants that restrict future investment, restrict capital structure decisions, or … on a range of accounting variables and what determines their selective use. Using a model of firm investment where firms … face uncertain cash flows and investment opportunities, we characterize the conditions under which it is optimal for a debt …